2009/2010 - YTL PowerSeraya

Transcription

POWERSERAYA
SUSTAINABILITY REPORT 2010
Welcome Note
The journey continues as we forge ahead to produce a sustainability report that provides greater transparency and disclosure
for the second consecutive year. This is significant given the
recent company changes with a divestment exercise that led to
an ownership change in March 2009.
To align with the operational philosophy and modus operandi of the parent company for synergistic opportunities, a restructuring exercise was carried out in PowerSeraya following
the divestment. This is disclosed in the report with reference
to the strong industrial union relationship between the union
and management to ensure the restructuring exercise was a
smooth and successful one.
Besides doubling the number of GRI indicators in this report,
we have also made conscious efforts to add greater depth to
the topic of climate change by relating it to our company strategy, local policies and initiatives as well as drawing references
to the global context.
In addition, we have added greater depth and breadth to the
topic of human rights by drawing its application from the Singapore context so readers will have a greater appreciation of local
human issues and its relevance to the company.
The reporting period covers a significant period in time when
the world was going through a financial turmoil in 2008/2009.
Even in 2010, this issue remains a real and imminent challenge
to both developed and developing countries. No company was
spared during the financial crisis and that included PowerSeraya.
In this report, we highlighted how our company’s risk management practices helped limit its exposure to the varied changes
in fuel oil prices and tight credit crunch faced during the height
of the global financial crisis.
On Product Responsibility, we have expanded our reporting to
elaborate on the innovative products developed for customers
which also helped to limit their exposure to the volatility of fluctuating oil prices. As we operate in a highly regulated electricity
market, we have also elaborated on our role as an active and
pro-active participant of the Electricity Market for the smooth
and efficient function of the market mechanism so that competitive electricity prices for the benefit of end-consumers can be
realised.
We continue to report on our internal and external initiatives
on the environmental and social fronts. In particular, we are
pleased to highlight our major investment in the community
through the establishment of the Energy Learning Hub at the
premises of our adopted school, Greenridge Secondary School.
We have also increased the report’s coverage of our business
operations’ environmental performance by highlighting new
items such as indirect energy consumption and corresponding
carbon dioxide emissions, water intensity as well as input materials used and recycled.
We hope that this year’s report will give readers a balanced and
extensive view of the company’s strategy and initiatives related
to sustainability.
Reporting Standards
The sustainability report is based on the Sustainability Reporting Guidelines of the GRI (Global Reporting Initiative), the de
facto global standard for reporting. It has undergone an independent third party assurance process and a GRI Application
Level check. This is a G3: B+ report, covering 57 performance
indicators and encompassing all the six indicator categories
(Economic, Environmental, Society, Labour, Human Rights &
Product Responsibility).
* Sector supplement in final version
CONTENTS
1
2
CEO’s Message 1
Report Compilation, Boundary and Application Level
Defining the Report Content
7
10
3
Organisational Profile
16
4
Economic Performance
5
Corporate Governance and Stakeholder Engagement
6
Climate Change and Us59
The Undeniable Association with Carbon
Indirect Sources of Carbon Dioxide Emissions
Carbon Dioxide Emissions at Source, Production and End-Use Taking Carbon Risks into Consideration
Investments in Sustainable Development 60
63
64
65
67
7
Environmental Performance
68
Scope of Sustainability Report5
(2.1) (2.2)
(3.1)
Strategic Profile 19
(3.2)
Operational Structure21
(3.3) Corporate Achievements24
26
(4.1) Revenue Streams
28
(4.2) Financial Performance 29
(4.3) Financial Assistance from Government 31
(4.4) Proportion of Local Spending and Contributions to Society 32
(4.5) Development and Impact of Infrastructure investment for Public Benefit
33
(4.6) Making Contributions Towards Employees’ Social Security 34
35
(5.1) Governance Q&A37
(5.2) Risk Management (feature on Risk Management Practices and Global Financial crisis)
43
5.2.iCrisis47
5.2.ii Fraud
48
(5.3) Stakeholders 50
5.3.i)
Stakeholder engagement (feature on Restructuring exercise)
51
5.3.ii
External Commitments
58
(6.1) (6.2)
(6.3) (6.4) (6.5) (7.1)
Operations 70
7.1.i
ISO 14001 and EMS 70
7.1.ii
Identification Process for Environmental Aspects
72
7.1iii Organisational Responsibility74
7.1.iv
Fuel Consumption
76
7.1v Indirect Energy Consumption
78
7.1.vi Emissions79
7.1.vii
Water
83
7.1.viii Wastes and Disposal
85
7.1.viv Volume of Significant Oil Spills
86
7.1.x Materials Used by Weight or Volume
87
7.1.xi Recycle Input Materials 89
7.1.xii Compliance with Local Laws and Regulations
91
7.1.xiii
Biodiversity92
(7.2) Workplace94
7.2.i Office Resource Consumption
95
7.2.ii Greening IT Infrastructure100
7.2.iii Internal Environmental Programmes
101
CONTENTS
8
The Environment and The Community105
9
Social Performance - Promoting a Safe, Healthy and Nurturing Environment 121
10
Social Performance - Product Responsibility
149
11
GRI Content Index
160
12
Third Party Assurance
174
(8.1) Environmental Investments
(8.2)
Social Investments 108
116
(9.1) Workplace Safety & Health123
9.1.iOur Safety Record124
9.1.iiWorkplace Safety Programs 125
9.1.iii
Safety Culture Survey
128
9.1.iv
Occupational Health130
(9.2)
Staff Welfare132
9.2.iHealthcare and Healthy Lifestyle134
9.2.iiNurturing Human Capital 135
9.2.iii
Staff Strength and Turnover141
9.2.iv
Labour Practices & Human Rights
143
(9.3)
Nurturing The Community
146
(10.1) Customer Satisfaction151
(10.2) Reduce Customer’s Exposure to Price Volatility
153
(10.3) Helping Customers Conserve Energy154
(10.4) Responsible Marketing and Advertising155
(10.5) Our Role in An Efficient and Competitive Electricity Market 156
CEO Message
CHAPTER 1
CEO’S MESSAGE
The global financial crisis, the competition for fuel oil
and natural gas as well as the global agenda on climate
change. You would probably have heard of these global challenges facing most energy businesses. Closer to
home, the lack of natural fuel oil sources present energy
security considerations for a tiny country like Singapore.
As a Singapore-based company, PowerSeraya faces a
similar challenge and recognises the need to pursue a
fuel diversification path to ensure that our business continues its sustainable growth path in the medium- to longterm. All these on the back of increased competition from
new players entering the energy scene.
CEO’S MESSAGE
Yet, flip to the other side and you’ll see opportunities
abound too for PowerSeraya to grow sustainably into the
future. The global agenda on climate change is gathering
pace, which means this presents opportunities for us to
explore cleaner and alternative sources of energy.
Operating in a knowledge-based economy can only seek
to heighten our awareness of the need to nurture existing
and attract new human capital, as well as build our social
capital (or networks and relationships as some may call it)
to drive the company’s growth.
These factors point to the increasing need for PowerSeraya
to balance the economic, social and environmental aspects
of the business – so we can continue to deliver profits for
our shareholders and at the same time, ensure due
consideration is given to the environment and society.
In the same vein, the heart of our business success lies
with our people. It stems no doubt from the fact that we
take pride in nurturing our staff. Our management enjoys an
excellent relationship with the union and works closely
with them to enhance worker productivity while ensuring
a healthy work-life balance in the organisation. This
supports the values of tripartism (a unique collaborative
relationship between companies, the unions and the government for the country’s economic well-being) that has
worked well for PowerSeraya.
2
CHAPTER 1
CEO’S MESSAGE
CEO’S MESSAGE
The recent restructuring exercise was conducted successfully to align with the operational philosophy practices of our new parent company YTL Power International Berhad. This move benefited staff with new job
experiences, expanded training opportunities and enhanced core technical competencies. The vital role the
union has played in the restructuring exercise has enabled PowerSeraya to make a smooth transition during
the restructuring exercise with minimal impact to our business operations and customers.
The remodification of our existing combined cycle plants
to co-generate steam in addition to electricity, has created not only an additional revenue stream, but also allowed us to gain higher operational efficiency. This move
to modify our existing plant assets also marks a key progressive step in realising our vision of becoming an integrated energy company.
Additionally, our new 800MW Combined Cycle Plant will
be operational in 2010, which will enable us to achieve
even greater levels of thermal efficiency, reduce the use
of carbon intensive fuels and potentially reduce carbon dioxide emissions by a further 10% from existing levels. This
corresponds with the resource efficiency goals highlighted
in the Sustainability Development Blueprint of Singapore.
Our engagements with our stakeholders continue on
the environmental and social fronts. Recent community
investments include the establishment of an Energy
Learning Hub at our adopted school Greenridge
Secondary School to educate youths on the interrelationship between energy and climate change.
Every year, we sponsor significant environmental events
like Clean and Green Singapore, as well as support
environmental NGOs and social charities through fundraising events like the CEO Semakau Run.
3
CHAPTER 1
CEO’S MESSAGE
CEO’S MESSAGE
We collaborate and organise joint environmental initiatives
like the 1 Degree Up Challenge and International Coastal Cleanup with external parties to raise environmental awareness to the wider community. Our customers are encouraged to go green by signing up for our e-billing features.
They are also empowered with the knowledge to better
manage their energy consumption through orientation
programmes that teach them how to better understand
their energy bills.
Internally, we seek to galvanise our staff into eco-action
and ‘walk the talk’ on energy conservation. Besides getting our
staff involved in green activities, we endeavour to nurture
them with a heart for the needy and have made incremental steps to enhance our social contributions either through
volunteering efforts or donations in kind. For example, our
staff volunteers have participated in social outreach initiatives involving disadvantaged children from Child@
Street 11. Every month, about 60% of our employees also
make voluntary contributions to the Community Chest via
the SHARE programme.
Beyond that, we continue to nurture and invest in talented
youths through our scholarship programme with the Nanyang Technological University of Singapore. Internships are
also offered to selected students each year so they can
gain practical work experience with the company.
In essence, PowerSeraya’s sustainability journey will
require a constant balancing act of economic, environmental
and social imperatives. The company recognises it has a
part to play in climate change action and remains committed
to this environmental stewardship role while fulfilling its
obligation to its shareholders to bring economic returns.
As the company works towards greater sustainability for
the future, it is my hope that our employees will similarly
adopt sustainable practices in their own lives and be lifechangers to the people around them.
John Ng Peng Wah
Chief Executive Officer
PowerSeraya Ltd
4
Scope of
Sustainability Report
CHAPTER 2
SCOPE OF THE SUSTAINABILITY REPORT
This is PowerSeraya’s second sustainability report. In
terms of report profile, we have increased its content to
include an additional financial year’s worth of data and
analysis. In doing so, our company fulfills its commitment
to the yearly reporting cycle.
SCOPE OF THE
SUSTAINABILITY
REPORT
“A company’s performance is
governed not only by its economic achievements, but also
its environmental and social activities to give a balanced view.”
The company underwent a restructuring exercise in March
2009 which arose from the divestment of the company
from Temasek Holdings Private Limited to its current parent company, YTL Power International Berhad. This has
added both depth and breadth to the scope of the sustainability report that included more human issues
to reflect the company’s continued focus on building
people capabilities as well as nurturing human relations
within the company. This is evident in the inclusion of
more indicators in the Labour category.
Compared to the previous sustainability report, the
reporting period of this report has been increased by one
year to cover a three-year period from FY06/07 (April 06
to March 07) to FY 08/09 (April 08 to March 09) unless otherwise indicated. That said, we have also included report
content beyond the above-mentioned three-year period.
For example, we have included report content to include
the restructuring exercise of our largest business group
(e.g. the Utilities Group) which was implemented in the
June to September 2009 period.
6
CHAPTER 2.1
The Sustainability Reporting Team (SRT), which was
formed for the purpose of compiling last year’s inaugural
report, continues to be relevant for this report. New SRT
members were added to the team (from seven to ten) to
enrich the report with new information as well as to inject fresh perspectives to the content. Similar to the previous year, the Environmental Department of the Corporate
Services Group leads the reporting team.
REPORT
COMPILATION,
BOUNDARY &
APPLICATION
This year a more decentralised approach to the reporting
process was adopted. Separate discussions (via emails
and more informal meetings) were held with the SRT members to gather information and inputs on sustainability areas
that were specific to their area of work. This approach was
done mainly with existing SRT members who had gone
through last year’s rigour of determining the report materiality as they were familiar with their areas of contribution to the report content. For new SRT members, a
greater length of time was taken to introduce the reporting process and discussions were held to determine
the significant content for inclusion in the report.
In general, all SRT members went through the following
stages of the reporting process:
a)
b)
c)
d)
e)
Determining report content (i.e. materiality)
Collation of Global Reporting Initiative (GRI) performance indicators, management
approach and information on standard disclosures
Report drafting
Vetting of report draft
Assurance process by a third-party and GRI check
7
CHAPTER 2.1
REPORT
COMPILATION,
BOUNDARY &
APPLICATION
Report Form and Format
Similar to the previous year, this year’s report has been
developed in two versions (online and PDF). New features
were added to this year’s online report to enhance readability and search experience. The enhancements include
the placement of the Page Tools (e.g. resize text, download chapter, download full report) at a convenient location so that it is accessible to readers at all times. It also
seeks to make it easier for readers to give their feedback
at any point in the online report. We made a conscious
effort to include more visual representations of our sustainability by adding more graphs and charts.
The online report is available 24/7 on our corporate website. Readers can select sections and make hardcopies of
them, or download a PDF version of the entire report.
Report Boundary and Application Level
As with the previous report, the report boundary covered
entities PowerSeraya Ltd, Seraya Energy Pte Ltd and
PetroSeraya Pte Ltd (the latter two are wholly-owned
subsidiaries of the former – see diagram 2.1). Seraya Energy (SE) is the retail arm of PowerSeraya and one of
the main players in the contestable electricity market. It
is material that SE be included in the reporting boundary. PetroSeraya, being the oil trading and bunkering arm
of PowerSeraya’s business, forms an important, growing
revenue stream in the company’s overall integrated energy
growth strategy. PetroSeraya is thus material to the report content.
Diagram 2.1: Corporate structure of PowerSeraya showing all the
report entities
8
CHAPTER 2.1
REPORT
COMPILATION,
BOUNDARY &
APPLICATION
Report Application Level
This report covers 57 Global Reporting Initiative (GRI)
performance indicators, a more than two-fold increase in
the number of indicators reported compared to the previous year’s report. It covers all core G3 and several significant Electric Utility Sector Supplement indicators across
all six categories (Economic, Environmental, Labour, Society, Human Rights and Product Responsibility).
PowerSeraya appointed an independent third party, Ere-S
Pte Ltd, to provide assurance on this report. This is a GRI
Level B+ report.
9
CHAPTER 2.2
The Sustainability Reporting Team (SRT) took into account
the following factors in determining the report content:
Materiality
DEFINING THE
REPORT CONTENT
“We have dedicated a section
to explaining our role in climate
change stemming from the
carbon intensive nature of our
business and the importance of
climate change.”
In the previous year’s report, we had dedicated a section
to explaining our role in climate change stemming from
the carbon-intensive nature of our business. While this
year’s report is no different, we have placed a greater emphasis on the local context by referring to the Singapore’s
Sustainability Blueprint and the National Climate Change
Strategy paper. Additionally, we have expounded in greater detail on how our company has taken into consideration carbon risks in our corporate strategy as well as our
given thought to achieving long-term sustainability in
Singapore’s context.
We continue to give an account of what we have reported
in the previous report as they are relevant and material.
Below summarises what is featured in this report:
Economic data - Key financial data are extracted from
our FY08/09 Annual Report and presented in this report
to give readers an overall picture of our company performance and its relation to sustainability.
Environmental data - A substantial part of the company’s environmental performance is driven by the management processes under ISO 14001. Power generation
operations involve a complex chain of chemical processes
which impact the environment and all compliance-related
environmental aspects are covered in the ISO 14001. In
this report, we detail the reporting structure and processes of the ISO 14001 which plays an instrumental part in
ensuring that environmental performance is constantly
measured, monitored and reported on a regular basis.
As in the previous year’s report, we continue to disclose
environmental aspects that may pose health risks to the
public or are related to climate change. Examples include
reporting the company’s sulphur dioxide emissions and
carbon dioxide emissions, as well as other greenhouse
gas emissions.
10
CHAPTER 2.2
DEFINING THE
REPORT CONTENT
On the social aspects of our business, we have included
the important role that the company has taken in the career development of its staff through its emphasis on training. We have highlighted the important role that the union
UPAGE occupies in terms of promoting employee welfare
as well as its collaborative relationship with management
in delivering the company’s goals. This is especially pertinent in light of the restructuring exercise which the company went through following an ownership change of the company. How the union and management worked together to
ensure positive outcomes from the restructuring exercise
are further elaborated in this report. In addition, the report highlights the challenges faced from the restructuring
exercise and how they were addressed with due attention
given to human issues. On the external front, our company has also taken a more proactive stance in getting
greater staff involvement to help the community. Details of
our community outreach activities are featured in detail in
the Social Performance section of this report.
Expanding on what was reported under Human Rights performance indicator category, we felt it was important to give
our stakeholders (especially those in foreign countries) a
deeper understanding of how human rights issues such as
child labour, indigenious rights and forced labour are being viewed and addressed in Singapore as this ultimately
translates to the practices being adopted in the company.
Thus, in addition to the matters concerning our employee’s
right, we have included in this report the subject of collective bargaining – giving an update on the developments leading to the renewal of the current collective bargaining agreement which is expiring in 2010.
11
CHAPTER 2.2
DEFINING THE
REPORT CONTENT
Our company has always focused strongly on corporate
risk management alongside our corporate governance
philosophy. In this report, we provided updates on how
the new ownership change in our company has impacted
on the risk management structure and systems. We also
included a feature of how our enterprise risk management
regime has helped to minimise the risk exposures of oil
price fluctuations and credit risk arising from the outset of
the global financial crisis in late 2008. We also continue to
feature fraud risk management and gave more details on
the training aspect of this subject matter.
In this year’s report, we expanded on the Product Responsibility section to include the vital role our company plays
in ensuring a fair and level playing field in the electricity
market which ultimately affects end-consumers in terms
of utility costs. In addition, we featured how our company
has helped customers to mitigate the risk of volatility of
electricity price (which fluctuates in tandem with fuel oil
prices) through innovative product packages tailored to
the different risk profiles of our customers. This product
innovation has helped us gain and retain customers.
Stakeholder Inclusiveness
This sustainability report is meant for all our stakeholders, which includes parties with whom the company has
interaction or over whom it has an influence. As such, our
employees, customers, major shareholders, board of directors, potential investors and suppliers, as well as the
community in which we operate, are all stakeholders. In
this report, we have included our engagement activities
and processes with these stakeholders, which are covered in ‘Corporate Governance’. Where possible, we
have also included the voices of our customers and suppliers through the disclosure of survey findings covering
the feedback and inputs of these stakeholders.
12
CHAPTER 2.2
DEFINING THE
REPORT CONTENT
Sustainability Context
The company sees itself playing a role in climate change
action, and this report aims to link the sustainable development approach we have taken in balancing economic
and environmental imperatives to deliver long-term outcomes. In this report, we have made conscious efforts
to explain in more detail how our company operates and
how aspects of sustainability are incorporated and viewed
in our company. This is to give our stakeholders a deeper
understanding of the sustainability philosophy of the company. How our company views carbon risk in relation to
the issue of energy security in Singapore’s context are
also given further elaboration in this report. On the social
aspect, our organisation views human capital as an important asset of the company and believes in nurturing its
employees as well as the community through social contributions, which centre on supporting talented youths. We
also maintain good union-management relations which is
key to the harmonious industrial relations the company
enjoys and in so doing, grow our social capital.
Completeness
The report has taken into account materiality, sustainability ability context and its stakeholders. All entities of
PowerSeraya, including its subsidiaries, have been included. Close reference were made to the Global Reporting Initiative G3 Sustainability Reporting Guidelines and
the recently released final version of Electric Utility Sector
Supplement in efforts to improve on the reporting quality
as we progressively work our way to achieving GRI Application Level A+ in the years ahead.
Quality
We strive to provide a balanced view of our company performance by including performance indicators that cover
all GRI indicator categories. Both positive and negative
results are presented and for easy trend analysis, charts
and graphs are used where appropriate. We feel that a
company’s performance is governed not only by its economic achievements, but also its environmental and social performance, which give readers a balanced view.
13
CHAPTER 2.2
DEFINING THE
REPORT CONTENT
Comparability
We have included three years-worth of content in the report (and in some areas five year’s data) so that there can
be some basis of comparison of the company’s economic,
environmental and social performance. Where appropriate, we have compared our performance against industry
or equivalent standards/benchmarks.
Accuracy
All content is backed by supporting documentary evidence
provided by members of the Sustainability Report Team
(SRT) which comprises employees representing every
major business unit in PowerSeraya. Where possible, we
included methodologies and assumptions explaining how
the performance was calculated. The appointment of an
independent party to conduct third party assurance on the
report content further lends credibility to the accuracy of
the key data being presented in this report via the an audit
process based on a recognised, international standard.
Timeliness
We aligned the environmental and social performance indicators with the economic indicators. The latter are in the
company’s Annual Report on a financial year basis, as the
financial year ended in March and the report was released
in August.
14
CHAPTER 2.2
DEFINING THE
REPORT CONTENT
Clarity
The report is meant for all stakeholders so we have tried
to write it in a clear, concise manner to cater to most readers. We have made an effort to avoid information that is
too technical, so that the report would be accessible to
readers without a technical background. In some areas,
we have provided readers with some background knowledge to assist them in understanding the relevance and
context of the report content. For example, in relating the
product responsibility role that our company does in ensuring a level playing field in the electricity market, we
found it pertinent to explain how the electricity market in
Singapore functions and how our compliance to the electricity market rules is relevant.
We value your feedback
We welcome all feedback and queries relating to this report. Please get in touch with our Environmental and Corporate Services Manager by corresponding via this email
address: [email protected]
15
CHAPTER 3
ORGANISATIONAL PROFILE
NAME
PowerSeraya Ltd
WHOLLY OWNED SUBSIDARIES
Seraya Energy Pte Ltd
Seraya Energy an Investments Pte Ltd
PetroSeraya Pte Ltd
PRIMARY SERVICES
Electricity generation
Electricity retailing
Oil trading and bunkering
(since April 2007)
ORGANISATIONAL
PROFILE
“PowerSeraya Ltd’s strategic
vision is to become an integrated
energy company, to diversify
into other commodities such as
steam, cooling water, gas and
oil trading.”
HEADQUARTERS
1 HarbourFront Place #17-01
HarbourFront Tower One
Singapore 098633
POWERPLANT STATIONS
Pulau Seraya Power Station
3 Seraya Avenue
Singapore 628209
Jurong Power Station
16 Jurong Pier Road
Singapore 619175
COUNTRY OF OPERATION
Singapore
OWNERSHIP
PowerSeraya Ltd is now a wholly-owned subsidiary of YTL Power. International Berhad since 6 March 2009. (see diagram 3.1)
17
CHAPTER 3
ORGANISATIONAL
PROFILE
CHANGES IN ORGANISATIONAL STRUCTURE
DURING REPORTING PERIOD
The company underwent ownership changes during the reporting period which resulted in an organisa
tional restructuring exercise in 2009.The Utiltiies Group underwent a major restructuring exercise in Q3 2009 to align its modus operandi with that of its parent company
.
MARKET SERVED
Singapore
EMPLOYEES (FULL TIME)
414 (for year ending March 2009). This is a 2.7%
increase in the number of full-time employees in FY 08/09 compared to the previous FY.
REVENUE S$3.58 billion (for year ending March 2009)
NET PROFIT AFTER TAX
S$172 million (for year ending March 2009)
EARNINGS PER SHARE
S$0.19 (for year ending March 2009)
RETURN ON ASSETS
7.8% (for year ending March 2009)
LICENSED GENERATION CAPACITY
3,100 MW
Diagram 3.1 :PowerSeraya is a wholly-owned subsidiary of YTL Power International Berhad
18
CHAPTER 3.1
STRATEGIC
PROFILE
“PowerSeraya recognises the
need to achieve a balance between economic returns, its
environmental footprint and
its contributions to society for
long-term sustainable growth.”
The PowerSeraya Group, a wholly-owned subsidiary of
YTL Power International Berhad, is in the business of producing, wholesaling, trading and retailing of energy, with
a primary focus on electricity. With a licensed generating
capacity of 3100MW, PowerSeraya is one of Singapore’s
largest electricity generators, supplying about 30% of the
country’s energy needs. Through its retail arm, Seraya
Energy, it has been providing a wide range of innovative
products and services to meet the diverse needs of its
customers. As part of our vision to become an integrated
energy company, the company entered into the fuel-trading and oil-bunkering business through our wholly-owned
subsidiary PetroSeraya Pte Ltd in 2007, further complementing PowerSeraya’s power-generating business and
Seraya Energy’s electricity retail business.
In our drive to become a leading integrated energy player,
the company’s strategy is to diversify into other commodities such as steam, cooling water, gas and oil trading as a
means to broaden our revenue streams. This requires the
integration of new infrastructure with existing power generating assets to achieve this strategy. The recent modifications to our existing natural-gas fired combined cycle
power plants (Blocks 10/20) has enabled the company to
produce steam (through the application of waste heat recovery principles) for our customers with sustainability in
mind.
The PowerSeraya Group remains committed to maximising value to its shareholders and customers while maintaining high standards of operational excellence and
delivery without compromising its commitment to the environment and the community.
19
CHAPTER 3.1
STRATEGIC
PROFILE
Our Sustainability Philosophy
Unlike many countries, Singapore is a tiny country with
limited natural resources. It has no fossil fuel deposits and
the potential for large-scale renewable energy adoption is
constrained by its land scarcity as well as its geographical
location. As such, the country is heavily dependent on oil
and natural gas imports to power its economy.
Being the second largest power generating company in
Singapore by licensed capacity, we supply close to 30%
of the country’s needs and play an important role in addressing the energy security concerns of Singapore over
the long-term. Coupled with these challenges, the growing agenda of climate change does place increasing pressure on companies like PowerSeraya to do their part for
the environment. It is on this backdrop of economic and environmental challenges that PowerSeraya recognises the
need to achieve a balance between economic returns, its
environmental footprint and its contributions to the society
for long-term sustainable growth. Indeed, this same philosophy is similarly shared by S Iswaran, Senior Minister
of State for the Ministry of Trade and Industry, Singapore,
where he stated during the release of the Economic Strategies Committee recommendation that “Singapore needs
to find a balance between economic competitiveness and
environmental sustainability and, at the same time, ensure
that its energy supply is secure.”
Details about our sustainable philosophy in relation to the
integrated energy strategy, is expressed in our Annual Report 2008/2009 (CEO’s Message).
20
CHAPTER 3.2
A review of PowerSeraya’s operation was conducted. To
align the organisation to the operational philosophy of the
parent company. A major restructuring exercise was conducted at the Utilities Group which resulted in an operating structure change that is now functional-based (from the
previous asset-based structure), with an added focus on
in-house operational maintenance. The regulation function
which was previously residing in Seraya Energy – one of
PowerSeraya’s subsidiaries – has been transferred to the
Legal and Regulatory Affairs department which currently
sits within the Corporate Services Group.
OPERATIONAL
STRUCTURE
CEO’s Office
The CEO leads a senior management team of seven to
create shareholder value and to realise the company’s vision to be the leading integrated energy company based
in Singapore.
Retail – Seraya Energy Pte Ltd
The retail and marketing arm of the PowerSeraya Group
handles key accounts servicing, marketing, billing operations
and the contact centre. It currently participates in the contestable sector of the electricity market comprising mainly of
companies in the commercial and industrial sectors.
21
CHAPTER 3.2
OPERATIONAL
STRUCTURE
Utilities
This group is responsible for the safe, reliable and efficient
generation of power to supply close to 30% of Singapore’s
energy requirements. The Utilities Group is divided largely into the two main divisions of Operations and Maintenance. Within the Operations Division are the Gas Plant,
Steam Plant and Multi-Utilities Services departments. The
Maintenance Division is made up of departments based
on the different areas of engineering expertise of Electrical, Mechanical and Technical Services as well as Facilities & Security. Other departments within the Utilities
Group include Health, Safety & the Environment, Capital
Projects, Performance & Planning and Admin & Purchasing.
Corporate Finance
Finance, Risk Management and Internal Audit fall under
this group. Apart from overseeing timely financial and
management reporting, integrity of internal controls and
treasury functions, this group charts our corporate risk
management framework.
Trading and Fuel Management – PetroSeraya Pte Ltd
This group oversees the operations of the four departments: Business Development and Planning, Physical
Oil Trading, System Operations and Terminal Operations.
The Trading and Fuel Management Group focuses on
operations related to fuel management and blending, terminal operations, sourcing and procurement of fuels and
physical trading and bunkering.
Corporate Services
Covering a diverse range of support services that extends
to Human Resource, Procurement and Contracts, Corporate Communications, Legal & Regulatory Affairs and
Environmental Sustainability, this group is tasked with
building a vibrant workforce and an innovative and commercial culture. It is also responsible for developing the
company into a socially responsible organisation with a
focus on environmental sustainability and aims to make
PowerSeraya the employer of choice.
22
CHAPTER 3.2
ORGNISATIONAL PROFILE
OPERATIONAL
STRUCTURE
Energy Markets
This group handles electricity market operations, proprietary trading and a new portfolio relating to gas market
operations. The three departments under this group are
the Electricity Market, the Gas Market and the Derivatives
Market. With the seamless integration of the three departments, this group seeks to transform the energy market in
Singapore.
Process and Innovation
The P&I Group is a dedicated team comprising IT Infrastructure, Enterprise Solutions and Business Solutions. It
seeks to develop and manage the IT assets and systems
of the company and align it to key business processes and
objectives. It also seeks to creatively use IT to automate
business processes and deliver innovative solutions.
Diagram 3.2. Operational structure of the company
23
CHAPTER 3.3
2009
• Best Sustainability Report (at ACCA Singapore Awards for Sustainabiity Reporting 2008)
• Best First Time Report (at ACCA Singapore Awards for Sustainability Reporting 2008)
• Community Chest SHARE Award (Silver)
• ISO 14001 Certification
• OHSAS 18001 Certification
• Singapore 1000 Company (by DP Information Group for PowerSeraya and Seraya Energy)
• CIO Asia’s 2009 100 Index
2008
Corporate
ACHIEVEMENTS
• Community Chest SHARE Award (Bronze)
-Global Water Awards (our desalination plant
was named ‘Desalination Plant of the Year’)
• CIO Honouree 2008
• Home Team National Service Award
-Meritorious Home Team Partner Award
• Meritorious Defence Partner Award
(by MINDEF Singapore)
• Singapore Global Trader Award
• ISO/IEC17025:2005Laboratory Accreditation
from SAC-SINGLAS
2007
• Community Chest SHARE Award (Bronze)
• FG50 (Fastest Growing 50) by DP Information Network (22nd place)
• Singapore 1000 by DP Information Network Pte Ltd
24
CHAPTER 3.3
Corporate
ACHIEVEMENTS
2006
• Singapore 1000 Company (by DP information Group for
PowerSeraya and Seraya Energy)
• 4FG50 (Fatest Growing 50) by DP information Network
(3rd place)
• Singapore Health Awards (Gold)
• Excellent Service Award, SPRING Singapore
(1 Gold, 5 Silver)
• 6th Singapore Call Centre Awards and 3rd Regional Call
Centre Awards 2006
Best Contact Centre Manager, Singapore – Silver
Best Team Leader, Singapore – Bronze
Best Team Leader, Regional – Bronze
25
Economic
Performance
CHAPTER 4
ECONOMIC PERFORMANCE
ECONOMIC
PERFORMANCE
“The Company’s vision is to be
a Leading Integrated Energy
Company – increasing existing
revenue streams while developing new ones for the longterm sustainable growth of the
company”
Though the company increased its FY 08/09 revenue
compared to the previous year, the company encountered
significant challenges to operating costs which resulted
in lower earnings. The onset of the global financial crisis
since Q4 2008 resulted in higher fuel costs and the provision for fuel inventory at lower costs, which increased
the company’s overall costs. The good performance by
PetroSeraya, the oil trading arm of PowerSeraya, doubled
their earnings from the previous year and contributed significantly to overall earnings of the company. Concurrently, the prudent risk management of the company helped to
limit the company’s exposure to oil price volatility as well
as credit risks that arose from the global financial crisis.
These factors helped to stretch the earnings of the company during these challenging times.
As the company continues on its path to be a leading integrated energy company, it aims to increase existing revenue streams and develop new ones for the long-term sustainable growth of the company. The continued economic
success of the company is vital not only for the survival of
the company. It translates to job creation for employees
that can in turn deliver positive impact to people’s livelihoods and society. It also enables us to continue investing
in sustainable development initiatives that would deliver
environmental and social benefits for the community now
and into the future.
27
CHAPTER 4.1
The main revenue streams of the company come from the
electricity generation services offered by PowerSeraya
Ltd, energy sales in the contestable market through Seraya Energy (our electricity retail arm), vesting contracts
with the Market Support Services License (MSSL) and oil
trading and bunkering services offered by PetroSeraya
(our oil trading arm). Steam is an additional utility service
which the company has just started to offer its customers
and should generate stable earnings in the near future.
Revenue
Streams
Diagram 4.1: Relationship between revenue streams and corporate
structure
28
CHAPTER 4.2
The information provided below is a direct extract from the
Annual Report 2008/2009:
Operating revenue/earnings
The Group’s operating revenue grew by S$784 million, a
28.1% increase over FY07/08 to S$3.6 billion contributed
mainly by higher electricity prices, increased revenue from
the sale of oil and a full-year operation of PetroSeraya.
FINANCIAL
PERFORMANCE
The average vesting contract hedge price, which was
pegged to three-month fuel oil forward, increased from
$143/MWh in FY07/08 to $190/MWh in FY08/09. This was
due primarily to a fuel oil price increase over the period.
Spot electricity prices during the year also rose in tandem
with the vesting contract hedge price.
Generation Units Sold was 9,541 GWh or 6.3% lower than
FY07/08 due to increased competition.
Overall system demand fell by 0.7% from FY07/08. Despite a contraction in system demand, retail market share
grew by 2.2%. Total units sold through the retail arm for
the year was 7,004 GWh.
Profitability
The Group’s net profit after tax of S$171.9m was mainly
the result of higher fuel cost, an unfavourable economic
environment which resulted in lower generation volume
from the power plant and lower electricity demand, as well
as the provision for fuel inventory at a lower cost.
29
CHAPTER 4.2
FINANCIAL
PERFORMANCE
Earnings per share & Return on Equity
The Group’s Return on Equity (ROE) for the year was
14.3% and Earnings Per Share (EPS) amounted to 19
cents for the year.
Basic EPS decreased by 24% to 19 cents in FY08/09 as
compared to 25 cents in FY07/08. The decrease is in line
with the lower profits after tax for the Group.
Return on Equity was 14.3% in FY08/09. This represented a decrease of 25% over last FY’s 19.1%. This was due
to lower profits as a result of the provision made to fuel
inventory.
Details of the financial performance of the company are covered comprehensively in the hardcopy version Annual Report 2008/2009.
30
CHAPTER 4.3
We did not receive any financial assistance from the Government in FY08/09.
Our community investments (comprising environmental
and social investments) in FY08/09 increased 83% to
S$312,837. This significant increase is due to our sponsorship of the Energy Learning Hub at the premises of
our adopted school, Greenridge Secondary School; our
inaugural sponsorship to the Clean Green Singapore
event as well as social contributions through the Nithiah
Nandan Book Prize and the PowerSeraya Scholarship
Programme launched in 2008. Further details of our community investments can be found in Section 8: ‘The Environment and the Community’
Financial
Assistance
from
Government
and Community
Investments
31
CHAPTER 4.4
Proportion of
Local Spending
and
Contributions
to the Local
Economy
PowerSeraya and its subsidiaries have operations that
are based locally in Singapore. None of these companies
have overseas operations. A high proportion of the goods
and services that are purchased by PowerSeraya and its
subsidiaries are made from local suppliers based in Singapore even though the organisation does not have a policy
or common practice for using local-based suppliers. Our
procurement practices are based on ‘best buy’ principles
(i.e. procuring ‘value for money’ product and services).
Supplier selection is based on price, lead time, service
levels, payment terms and quality (i.e. meets specifications and complies with legislation including environmental regulations). Prior to supplier selection, suppliers are
required to declare whether they are certified with recognised environmental systems/standards such as the ISO
14001 before they are granted ‘Approved Vendor’ status.
Based on goods receipts for the three-year period FY06/07
to FY08/09, an estimated 93% of the purchases are from
local suppliers. These figures suggest the significant
amount of spending that is being made by the company to
support local businesses in the supply chain and contributions to the local economy.
32
CHAPTER 4.5
PowerSeraya, as an integrated energy company, sees itself playing an important role in educating the community
on energy conservation. This is evident from our significant investment in establishing the Energy Learning Hub
at the premises of our adopted school, Greenridge Secondary School.
Development
& Impact of
Infrastructure
investments
for public
benefit
Over the period FY07/08 to FY08/09, PowerSeraya donated a sum of S$170,000 to construct the Energy Learning Hub (ELH). The idea of the ELH was first mooted by
Greenridge Secondary School who was keen to enhance
environmental education for its students. A series of discussions between the school and PowerSeraya eventually led to a proposal of the learning hub that would serve as
a resource centre for not only the students of the school
but also the Cluster West 6 schools in the neighbouring
areas. PowerSeraya approached the 11 schools in the
West 6 cluster, covering 11,000 students and 770 teaching staff, to make a presentation on the ELH. The ELH
also received support from the Superintendent of Cluster
West 6 as well as principals from the eleven schools.
Approval from the Board of PowerSeraya was subsequently obtained to construct the ELH which led to several round of discussions with the school on the design,
infrastructure and content aspects of the ELH. The initial
plan was for the ELH to showcase content covering various environmental themes. After much deliberation, it was
agreed that the ELH would be energy-centric, featuring
the linkage between energy and climate change, with a
mini rainforest to depict the carbon sink concept. The ELH
whose initial name was Environmental Learning Hub was
then renamed to Energy Learning Hub to suit the theme.
The hub also featured PowerSeraya’s role in climate
change action as well as messages from the National
Environment Agency which were aligned with the energy
conservation theme. Further details of the ELH can be
found in Section 8: The Environment and The Community.
33
CHAPTER 4.6
E3CONOMIC PERFORMANCE
Companies with operations in Singapore are required by
law to make monthly contributions into the *employees’
Central Provident Fund (CPF), the national social security
savings plan that provides working Singaporeans (including those holding Permanent Resident status in Singapore) with a sense of security and confidence in their old
age. The CPF aims to provide a retirement income to meet
one’s basic needs such as a roof over one’s head upon
retirement and savings for future medical expenses. This
is unlike other jurisdictions where the employee’s retirement funds are met by the organisation’s pension funds.
Making
Contributions
Towards
Employees’
Social Security
Every month, PowerSeraya makes contributions to its
employee’s CPF. The CPF contribution rates, which are
percentages of their current wages, vary according to
age starting from 5% to 14.5% as stipulated by the CPF
Board. In FY08/09, the company’s contributions to its employees’ CPF, which covers 98.3% of the workforce, totalled S$4.7million.
*Employee is any person (excluding foreigners with no
Permanent Resident status in Singapore) who is employed in Singapore and any Singaporean seaman who is
employed by an employer under a contract of service or
other agreement entered into in Singapore.
34
Corporate
Governance
& Stakeholder
Engagement
CHAPTER 5
CORPORATE GOVERNANCE AND STAKEHOLDER ENGAGEMENT
The changes in the ownership of the company (with new
owners YTL Power international Berhad) have not altered the strong emphasis placed on corporate governance in the company. PowerSeraya is committed to
maintaining high standards of corporate governance, professionalism and accountability to safeguard and create
long-term value and returns to its stakeholders through
the application of sound policies, practices and internal
controls.
CORPORATE
GOVERNANCE
AND STAKEHOLDER ENGAGEMENT
The following chapters, covering our corporate governance
structures, have been updated following the divestment of
PowerSeraya from Temasek Holdings to become a wholly-owned subsidiary of YTL Power International Berhad
from 6 March 2009.
“The robust corporate governance system ensures that the
company’s business practices
are carried out in a responsible
and ethical manner. It serves
to protect the interests of our
shareholders as well as other
stakeholders that have interactions with our company.”
36
CHAPTER 5.1
What is the governance structure of PowerSeraya, such as the committees for specific tasks
such as setting strategy or providing organisational
oversight?
GOVERNANCE
Q&A
The highest governance body in PowerSeraya Ltd is the
Board of Directors (BOD) which provides organisational
oversight on areas such as business strategy, risk
management, employee compensation and company policies. The BOD has two committees to assist in the execution of its responsibilities:
• Audit Committee – responsible for the financial reporting,
internal controls and compliance issue (operations and
finance)
• Human Resources and Remuneration Committee – responsible for human resources policies and compensation matters.
The composition of the BOD as well as details of each BOD
member can be found under the ‘Board of Directors’ Chapter of the Annual Report 2008/2009.
Is the chairman of the BOD also an executive officer in PowerSeraya and, if so, what is his function
within the management?
No, the chairman of the BOD is not an executive officer of
the company.
How many people in the BOD are independent
and/or non-executive members?
As of 31 March 2009, the BOD consists of three members,
two of whom are non-executive members. The only
executive member of the BOD is the Managing Director of
PowerSeraya. A non-executive director is generally considered a director who has no involvement in the day-to-day
running of the company and is not employed by the company.
As such, a non-executive director will usually devote part of
his time to the affairs of the company as an independent
adviser on matters of policy and strategy.
37
CHAPTER 5.1
GOVERNANCE
Q&A
What mechanisms do you have for the shareholder and employees to provide recommendations
or direction to the BOD?
PowerSeraya was a wholly-owned subsidiary of Temasek
Holdings Ltd during most of the reporting period. PowerSeraya was divested from Temasek Holdings and became a wholly-owned subsidiary of YTL Power International Berhad on 6 March 2009. There are no minority
shareholders, and PowerSeraya’s sole shareholder appoints the directors on the BOD.
Employees have the right to raise concerns anonymously
through a whistle-blowing policy which is covered under
the company’s Code of Ethics.
UPAGE (Union of Power and Gas Employees) represents
our employees who are union members and they make
up more than half of the company’s staff. UPAGE and the
management of the company meet on a regular basis
to discuss topics relating to the welfare of the union members as well as on areas of collaboration where the union
and the management can work together to achieve company goals, among other issues.
Is there any link between compensation for BOD
members, senior managers, and executives and
PowerSeraya’s performance, including social
and environmental performance?
The members of the Board of Directors are not paid director’s fees on an annual basis for the roles and responsibilities they carry out. Papers covering financial,
environmental and social subjects are tabled regularly at
the BOD level. For dedicated attention, two committees (Audit Committee and the Human Resources and Remuneration Committee) are set up to scrutinise issues in
greater detail, such as business planning and strategies; corporate governance and risk management; and
human resource matters including industrial relations.
The BOD appoints directors to head and be members of
the two committees.
38
CHAPTER 5.1
GOVERNANCE
Q&A
All of our employees are covered in an established and
structured performance management system where bonus and salary remuneration are tied to group and individual performance targets aligned to our overall performance goals. This include social and environmental
performance. On the latter, it encompasses the environmental performance of the power plant operations as
well as environmental initiatives organised or supported
by the organisation for employees and the community.
The establishment of the Environmental Department in
late FY06/07 shows our emphasis on corporate social
responsibility with a focus on the environment. The bonus and increment of employees from the Environmental Department and the group heads concerned are tied
to the performance of the corporate social responsibility
goals which include targets for environmental and social
items. Our social performance includes the various community programmes covered under the corporate social
responsibility goals. These goals form part of the corporate performance targets which are tracked by the BOD
on a quarterly basis.
What processes are in place for the BOD to ensure conflicts of interest are avoided?
If there is any conflict of interest, the individual BOD member who is in a position of conflict of interest will not vote
on the matter. Our annual report includes annual financial
statements which require directors to declare whether
they have any interest in the shares or debentures of the
company or its related corporations in accordance with
the Singapore Financial Reporting Standards.
Our tender process for the procurement of products or
services include procedures that require members of the
Board of Directors to declare whether they have an interest in the suppliers or service providers bidding for the
tenders.
39
CHAPTER 5.1
GOVERNANCE
Q&A
Is there a process for determining the qualifications and expertise of the BOD members
guiding PowerSeraya’s strategy on economic,
environmental and social topics?
PowerSeraya prescribes to the standards set by the Accounting Standards Council, which took over the task from
the Council on Corporate Disclosure and Governance
with the enactment of the Accounting Standards Act on 1
November 2007.
In sourcing and considering the candidates for appointment as directors to the Board, his qualifications and experience will be scrutinised by our Shareholder in relation
to the prevailing composition of the Board expertise and
the desired profile.
40
CHAPTER 5.1
GOVERNANCE
Q&A
What internally developed statements of mission
or values, codes of conduct, and principles do
you have that are relevant to economic, environmental, and social performance, and what is the
status of their implementation?
Our vision is to be the leading integrated energy company
based in Singapore.
Our mission statement is: “At PowerSeraya, our relentless
pursuit is to maximise value for our shareholders, customers, employees and the community.”
Our guiding business principles include:
•
Optimal development and utilisation of resources
•
Sound environmental practices
•
Product/service differentiation
•
Creative and vibrant workforce
Our core values are “Venture, Innovation, Best Practices,
Respect, Accountability, Nurture and Teamwork” (VIBRANT
for short)
Our Code of Conduct covers areas such as health and
safety and fraud, which are relevant to environmental and
social performance. Our Code of Ethics covers areas such
as safe workplace and environment and whistle-blowing.
Each employee is given a copy of the Employee Handbook
which covers the above statements of mission, vision and
values. The corporate website and the intranet also communicate these corporate messages. We also have posters about them throughout the workplace.
41
CHAPTER 5.1
GOVERNANCE
Q&A
How does the BOD oversee PowerSeraya’s identification and management of economic, environmental, and social performance, including
relevant risks and opportunities, and adherence
or compliance with internationally agreed standards, codes of conduct and principles?
The BOD meets at least quarterly to be updated on the
progress of the company’s performance which includes
economic, environmental as well as social aspects. They
also provide advice and direction on issues facing PowerSeraya and how to move the company forward. From
time to time, the BOD appoints external consultants and
auditors to augment expertise and provide advice on specific company matters. The BOD is supported by two main
committees: the Audit Committee looks into the risk management aspects of the organisation with the Risk Management Committee which provides quarterly reports to
the Audit Committee; and the Human Resources and Remuneration Committee looks into HR policies as well as
the Code of Conduct.
How do you evaluate the BOD’s performance, particularly with respect to economic, environmental
and social performance?
There are no formal processes to evaluate the performance of the BOD. However, there is the practice of reelecting and rotating BOD members for a second consecutive term which is an indirect means to evaluate members
who wish to be considered for a new term.
42
CHAPTER 5.2
Risk Management for Organisational Value Optimisation
Risk
Management
At PowerSeraya, we view risk management as a necessary and important function that serves to protect the
enterprise value of the company. Taking a precautionary
approach through the various risk management practices
within the company helps to mitigate the multiple risks
that the company encounters in its daily operations. Due
to the interdependent nature of the business operations
of PowerSeraya and its subsidiaries, prudent risk management aims to minimise the risk impacts that affects
the business ecosystem of the PowerSeraya Group. This
way, it seeks to also optimise the value chain across the
various business entities.
We have a corporate risk management framework that
covers the different types of enterprise risk. Under this
framework, enterprise risks are identified by the respective business units and significant risks are documented
in the Corporate Risk Register and monitored. The business risks are expected to identify mitigation measures to
address the enterprise risks and implement them accordingly in efforts to reduce the risk exposure. We employ
risk monitoring and reporting systems to enable early detection and escalation of risks to the various levels for review to take appropriate actions. Diagram 5.1 shows the
risk-management cycle practiced in the company.
43
CHAPTER 5.2
Risk
Management
Diagram 5.1: Risk-management cycle
PowerSeraya has put in place a structure to manage the
risks of the entire company. The committees and their respective roles in risk management are shown in Diagram
5.2. We have the Risk Management Committee (RMC)
which is responsible for the development and implementation of processes that identify, measure, monitor and
control risks within the company. The RMC is headed by
a Chief Risk Officer (CRO) appointed by the Board.
Positive Outcomes to Risk Management Committee with New Ownership Changes
There were no changes to the existing risk management structure of the company even when new owners YTL Power International Berhad came on board in
6 March 2009. However, there were several changes to
the key appointment holders which led to two changes
in the composition of the risk management committee
in 2009. The new members of RMC come from diverse
backgrounds and their experiences has injected valuable perspectives to how risk can be better managed to
enhance the value of the organisation. For example, the
appointment of our new CFO cum CRO, has contributed
his experience in dealing with financial issues related to
banking like credit granting which would have an impact
on enterprise risk if mismanaged.
44
CHAPTER 5.2
Risk
Management
Reporting to the RMC are the various risk owners who
are responsible for managing and monitoring risks of their
business units. The Enterprise Risk Management (ERM)
Department collates all reports from the risk owners on a
quarterly basis. The ERM Department primarily manages
the overall market risk of the company and works with the
different risk owners to manage other types of enterprise
risks that include (but are not limited to) the following:
•
•
•
•
•
•
•
•
•
•
Market Risk
Credit Risk
Liquidity Risk
Regulatory and Legal Risk
Project Risk
Health and Safety Risk
Operational Risk
Integrity Risk
Human Capital Risk
Business Continuity Risk
Diagram 5.2 : Organisational structure for Risk management
45
CHAPTER 5.2
Risk
Management
How Risk Management has protected our enterprise value during the onset of the global financial crisis in 2008
Due to the interdependency between oil prices and our
business operations, strong oil fluctuations can have an
adverse impact on the profitability of the company. During the global financial crisis which started in the last
quarter of 2008, the world experienced a huge dip in oil
prices. The company managed to mitigate its loss due to
the sharp drop in oil prices from the robust risk management systems in place. The exposure to the company
from the oil price fluctuations were limited by capping
the open positions of our oil traders. The Enterprise Risk
Management (ERM) team provides daily reports on the
day’s open positions to the management who will then
make informed decisions to manage the company’s risk
exposure. A system of alerts enables the management to
be notified of any trading positions that has exceeded a
certain allowable threshold and this triggers precautionary measures to be taken to limit losses.
Besides strong oil fluctuations, another challenge encountered during the financial crisis is the credibility of
counterparties. One month before the collapse of Lehman Brothers, the ERM proposed to the management to
freeze its credit limits with Lehman when bad news about
the company continued to emerge in the market. No
additional trade was done after the management’s approval. During the financial crisis, more counterparties’
credit limits were freezed after ERM’s review. Besides a
few reputable counterparties which ERM deemed as still
being financially strong and sound to trade with, PowerSeraya turned to the Exchange (SGX and NYMX) to
complete its hedging requirement which has virtually no
credit risk.
46
CHAPTER 5.2
Risk
Management
5.2.i
Crisis
As a responsible company, we are committed to safeguarding the well-being of our employees, contractors,
customers, the public and the environment. PowerSeraya adopts a three-level response framework for handling
emergencies.
Level 1 – The Site Incident Response Team re
sponds and controls minor incidents.
Level 2 – The Emergency Management Team han
dles more serious operational incidents with wider potential implications.
Level 3 – The Crisis Management Team, which is responsible for the protection of the company’s value and image, deals with strategic issues and high-level shareholder communications during an escalated incident.
Ten major operational incidents and response plans have
been identified in the organisation (below). The response/
contingency plans are reviewed regularly to ensure they
are updated against changes in business operations and
regulations.
Table 5.3: Ten major operational incidents and response/contingency
plans
47
CHAPTER 5.2
Risk
Management
5.2.ii
Managing Fraud Risk
The management of PowerSeraya recognises the significance and impact of fraud risks if these are not well
managed. The company has a Fraud Risk Management
(FRM) framework which it views as important in protecting
the interests of shareholders, employees as well as other
stakeholders who have dealings with the company. The
overall responsibility of implementing and overseeing the
FRM framework lies with the Fraud Control Officer (FCO),
supported by the Fraud Risk Assessment Committee. Diagram 5.4 shows the organisational structure for FRM.
In 2007, the Fraud Risk Management (FRM) Policy was
formalised and approved by senior management and the
Audit Committee. It aims to draw together the preventive,
detective and resolution, and reporting initiatives adopted
by PowerSeraya in one document and to:
•
•
Promote awareness of potential high fraud risk areas
Develop appropriate strategies and controls to
minimise the risks of fraud and consequent losses.
At PowerSeraya, all business units are periodically analysed for fraud risks (including corruption which is a subset
of fraud). Since the formulation of the FRM Policy in 2007,
there have been no confirmed incidents of fraud arising
from allegations received and investigated. Fraud risk assessments are conducted on business processes (e.g.
procurement, treasury) which cut across multiple departments and functions in the organisation.
48
CHAPTER 5.2
Risk
Management
Complementing the FRM Policy are the Code of Ethics
and the Code of Conduct. The former serves to guide employees in making sound and ethical decisions. The latter
aims to uphold the integrity and image of the company
through the employee’s diligence and due care in the discharge of his/ her duties.
Fraud risk awareness workshops are also conducted periodically to help employees identify potential red flags.
From FY 2006/2007 to FY 2008/2009, a total of three fraud
awareness workshops were conducted involving close to
148 employees. The workshops covered topics like the
fraud risk policy, potential activities leading to fraud and
the role that employees have on fraud detection. Employees are also encouraged to report known or suspected
incidences of malpractice in accordance to with the Employee Handbook.
Diagram 5.4: Organisation structure for fraud risk management
49
CHAPTER 5.3
Our interactions with our stakeholders, be it our business
partners, customers, suppliers or the community enable
us to increase our financial capital, nurture our human
capital and at the same time provide us with the opportunities to enhance our social and environmental capital.
Our stakeholders thus include groups that directly or indirectly contribute to the sustainable growth of the company
through a balance of our economic, environmental or social performance.
STAKEHOLDER
“One of the CSR Strategic
Thrusts is to grow with the
community. PowerSeraya sees
itself as being part of the climate change solution and regularly engages the community
through environmental events
and initiatives.”
To identify the stakeholders with whom we should engage, PowerSeraya takes its direction from our Corporate
Social Responsibility (CSR) Strategic Thrusts which was
developed in consideration of our integrated energy strategy, as well as challenges and opportunities facing the
company. These cover five areas which involved the following stakeholders as shown in the table below.
* UPAGE stands for Union of Power and Gas Employees
In addition to the CSR Strategy driving our engagement
with stakeholders, our economic performance is driven by
our vision and mission statement which will involve the
engagement of stakeholders such as business partners
and service providers for the various economic-related
activities/initiatives.
Our engagement with the government agencies for environmental performance relates to compliance towards
environmental laws and regulations. For raising environmental awareness and social work among employees
and the community, we work closely with the government
agencies, NGOs and schools for our CSR initiatives.
50
CHAPTER 5.3
STAKEHOLDER
5.3.i Stakeholder Engagement
PowerSeraya believes in continuous engagement with
its many stakeholders to keep abreast of the latest developments and to communicate our views to all parties
with whom we interact. It is the process of interaction that
ideas flow, opportunities are found and where innovation
can take place in our relationships with our stakeholders.
Our stakeholder engagement allows us to gain input and
feedback on our business, clarify perceptions of our company and foster constructive relationships for the benefit
of our business as well as the community. We engage our
stakeholders in various ways ranging from formal meetings, dialogue sessions, customer events and initiatives
with the community. These are just some of the more specific ways in which PowerSeraya engages its main stakeholders.
Communities
PowerSeraya sees itself as part of the climate change solution and regularly engages the community through environmental events organised, supported or participated
in by the company. Our engagement with the community
also extends to meaningful causes that benefit society.
Throughout the years, we have involved the community in
both environmental as well as social initiatives. For example, our joint initiative with our landlord on the ‘1 Degree
Up Challenge’ is an annual event aimed at getting office
tenants to conserve energy by raising their office temperature by 1°C on World Environment Day. In 2009 we had
staff volunteers who spent time with the intellectually disabled during our bi-annual Family Day event. Our support
for community work also comes in the form of donations
to NGOs that seek to enhance the lives of the socially
marginalised or to care for the environment. Details of
our community engagements can be found in Chapter 8:
‘The Environment and the Community’.
51
CHAPTER 5.3
STAKEHOLDER
Government Agencies and Non-Governmental Organisations (NGOs)
Our main engagement with NGOs and government bodies is our contact with the National Environment Agency
(NEA), the National Electricity Market, Jurong Town Council (JTC), the Energy Market Company and the Energy
Market Authority. In 2009, we have been working closely
with NEA and the South West Community Development
Council to develop the Responsible Energy Advocates
Programme (REAP), which is due to be launched in
FY10/11. We also engage societies and NGOs such as
the Singapore Environment Council, the Singapore Compact Waterways Watch Society and the Singapore Polytechnic Environmental Club to collaborate on CSR activities that benefit the environment and the society.
Customers
We run energy efficiency and education events to carry
out our product responsibility beyond the provision of safe
and reliable electricity. At these events, customers gain
an insight into electricity generation and learn about energy conservation solutions. Through these events, we
also gain customer feedback, learn about their concerns
and as a result, innovate our products to tailor to our customer’s varied needs. For further details, kindly refer to
Chapter 10: ‘Product Responsibility’.
In June 2008, a customer survey was conducted to understand the correlation between the high customer satisfaction rate (from the findings of the customer satisfaction survey done in 2007) and customer loyalty. Details of
the customer survey can be found in Chapter 10: ‘Product
Responsibility’
52
CHAPTER 5.3
STAKEHOLDER
Shareholders, Management and Staff
The Board of Directors holds quarterly meetings with the
senior management team to update themselves on the
progress of the company performance, discuss and develop the business strategy, develop medium- to long-term
plans and provide advice on problems and challenges.
Our staff management dialogues are a means for the
management to update the staff every quarter on the
company’s performance, understand the concerns of staff
and elicit feedback. When PowerSeraya was in the midst
of a divestment exercise in 2008 and early 2009, the staff
management dialogue sessions were also used as a platform by the union to manage the anxieties of our staff( the
change of owners eventually took place in March 2009).
The Business Group Retreat is an annual event held by
each group to discuss plans and goals for the coming financial year. The outcomes of the retreats are used as
inputs for the Management Retreat where corporate-wide
business plans and goals are discussed by the senior
management team. The outcomes of these discussions
are then shared with the business groups so that amendments to plans are updated. The plans and goals for the
coming financial year are later shared with all employees
during Staff Management Dialogue sessions and through
a meeting with UPAGE.
Finally, to tie these activities with our sustainability as a
business and for the environment, the Sustainability Reporting Team (SRT) met several times over the report
preparation period (Oct 2008 to Feb 2009). For details of
the process undergone by the SRT, please refer to Chapter 2: ‘Scope of Sustainability Report’.
Suppliers
PowerSeraya participates in the annual V94.3A/84.3A
Asia Pacific User Group Meeting where users of the Siemens V94.A/83.A machinery share their experiences and
knowledge on the operations and maintenance of this machine used in power plants.
53
CHAPTER 5.3
STAKEHOLDER
As an initial step towards sustainable procurement
practices, a pilot initiative was done to urge our suppliers to make voluntary submissions of the sustainability
procurement checklist in the last quarter of 2009. The
sustainability checklist aims to find out more about their
sustainable practices and the sustainability of the products supplied. To find out more about this pilot initiative,
please refer to Chapter 7: Environmental Performance.
Employees and their trade unions
A close and productive working relationship exists between the management of the company and UPAGE with
both parties committed to working together in a strategic
alliance to meet challenges, resolve issues and seize
opportunities with a view to enhancing business competitiveness and the well-being of employees. PowerSeraya
takes a highly consultative approach, engaging UPAGE
to share information, discuss business strategies and
plans, taking into consideration each other’s constraints,
concerns and interests and seeking win-win solutions.
The close union-management ties is especially relevant
to the company in light of Singapore’s drive to increase
the country’s productivity by 2% to 3 % over the next
decade as disclosed during the release of the Singapore
Budget in February 2010.
All employees of PowerSeraya and its subsidiaries have
the freedom to join the UPAGE (Union of Power and Gas
Employees). There is also freedom for collective bargaining by the UPAGE on matters concerning employees. In
FY2008/2009, about 52% of the workforce is covered by
the collective agreement and about 73% of PowerSeraya’s workforce are UPAGE members.
54
CHAPTER 5.3
STAKEHOLDER
On average, UPAGE and the management meet four
times a year. Two of these meetings discuss bonus payout and salary increment for employees. In addition,
the Management will share with UPAGE at the start of
the financial year the business plans and goals so that
both parties are aligned. On an informal basis, these
two parties also hold meetings to discuss and resolve
any issues that may arise. One of the important issues
that is expected to be discussed in 2009/2010 is the reemployment of older workers. There were altogether
eight Union-Management meetings in FY2006/2007 to
FY2008/2009 period.
The Collective Agreement (CA), which came into effect on 1 July 2007, reiterated both the company and
the union’s commitment to protect the interests of the
employees. With the current CA due for expiry in 2010,
the Human Resource Department along with the senior
management, are already making plans to review the CA
for the new term. Some of the expected issues pertinent
to the CA that would be discussed with UPAGE include
the i) Re-employment of older workers, ii) Staff Productivity and iii) Pay-For-Performance Bonus Structure. As
with previous years, a series of meetings with UPAGE
will be held with management to discuss and negotiate on matters that affect our employees and reach an
agreement on the final terms and conditions of the new
CA. The Board’s approval will then be sought on the new
CA.
Under the current CA, there is no mention of a minimum
notice period regarding significant operational changes.
However, there is a mutual understanding on how significant matters (affecting employees) are handled under
the guidance of Singapore’s unique tripartite industrial relations. This indicates that the Singapore Government,
the employees and unions work together to address the
challenges of maintaining a productive workforce in today’s competitive, globalised world for the mutual benefit
of employers, workers and society. Singapore’s industrial
relations system is governed by the values of tripartism and
this has worked well for the country for many decades.
55
CHAPTER 5.3
STAKEHOLDER
The Restructuring Exercise of the Utilities Group
- A Fine Example of the Excellent Working Relationship between Union and Management
One fine example of how significant operating changes are
being handled in PowerSeraya (guided by the tripartism values) is the recent restructuring of one of the company’s business groups, namely the Utilities Group. Following the new
ownership change in PowerSeraya since March 2009, the
restructuring of the Utilities Group was necessary to align
with the operating structures and philosophies of parent company YTL Power International Berhad. This is done to take
advantage of the synergistic and collaborative opportunities
from having all power generating companies operate under
the same modus operandi. The restructuring also meant that
there was greater emphasis on developing core competencies and this led to less reliance on external parties for the
maintenance of plant equipment.
The Utilities restructuring was rolled out in three major phases over four months (June to September 2009). The first
phase ‘Preparing for Change’ essentially involved the planning work to prepare the affected staff for the transition to
the new organisation structure from the existing asset-based
modus operandi to one that is functional-based. Firstly, the
management staff of the Utilties Group had several rounds of
meetings to develop the new organisation structure to support the new modus operandi and the manpower requirements to run the power plant smoothly. The union was also
consulted occasionally to seek their opinion and inputs on
the new organisation structure. This was followed by the redesignation of staff which involved a considerable amount
of work to assess each and every staff member’s skills and
competency to match them to their new job scopes. Conscious efforts were made to ensure that there was sufficient
on-the-job training (OJT) for staff in new and expanded roles
to cope. This was done by assigning inexperienced staff to
the more experienced ones so that knowledge and skills
could be learnt and transferred in a time-effective manner
through hands-on training under the close supervision of
mentors. Formal classroom training were also identified for
staff to equip them with the necessary knowledge so they
can perform effectively in their new roles.
56
CHAPTER 5.3
STAKEHOLDER
After the first phase, the second phase was ‘Managing The
Change’. This involved the execution of the restructuring plan
and managing the change process to ensure smooth transition on the ground. Throughout the transition, the union in
close collaboration with the management team of the Utilities
Group played a major role in assisting staff to shift to the new
roles and facilitated close door discussions with staff who exhibited signs of anxiety or discomfort in their new roles as well
as through dialogue sessions with all affected staff to communicate and re-assure them on the new changes.
The last phase of the restructuring, which is ‘Reinforcing the
Change’, aimed to bridge any unforeseen gaps in the restructuring process and ensure that staff had settled down comfortably in their new roles. Staff feedback was gathered in the
form of surveys to assess whether the restructuring plans had
achieved the intended objectives. It also served to flag out
any staff issues that needed to be addressed.
As a whole, the restructuring exercise was a huge success
due to the prudent planning and execution work performed
by the Utilities Group who worked closely with the union to
communicate and assure staff on the new changes. Besides
the Utilities Groups, other business groups also played critical supporting roles to ensure that the restructuring process
went smoothly. Accounting changes, new job descriptions
and the re-allocation of inventories had to be effected in line
with the new organisation structure of the Utilities Group. The
restructuring exercise not only resulted in cost savings from a
greater emphasis placed on developing in-house capabilities
over outsourcing, it also provided immense opportunities for
staff to maximise their true potential and thus developed their
confidence. It also broadened the skill sets of several staff in
their new found roles. In addition, the close union and management relations played a crucial role in preparing staff for
the restructuring exercise – human issues were handled in an
effective and sensitive manner during the execution phase to
ensure that the aims of the restructuring exercise were met.
57
CHAPTER 5.3
STAKEHOLDER
5.3.ii
External Commitments
What externally developed economic, environmental, and social charters, principles or other
initiatives does PowerSeraya subscribe to or endorse?
PowerSeraya is a member of the Singapore Compact,
which is a participant of the UN Global Compact.
What associations (such as industry associations) and/or national/international advocacy
organisations is PowerSeraya involved in, is on
the governing bodies of committees of, funds or
views membership as strategic?
PowerSeraya’s external commitments include the following:
•
Singapore Compact (Member)
•
Sustainable Energy Association of Singapore
(Member)
•
National Environment Agency – Corporate and
Schools Partnership (CASP) Programme
•
Singapore Work Skills Qualification (WSQ) – our
CEO is Steering Committee member of the WSQ
•
Gas Industry Structure Implementation Steering
Committee (GISISC) – our CEO represented the
company in the GISISC till June 2009
To date, the company is not actively involved in any public
policy development and lobbying activities related to sustainability. The company also does not have a representative that holds a public policy position on sustainability
issues/matters. Notwithstanding this, the company does
assign representatives to sit in working committees led by
government-linked agencies such as the WSQ for skills
upgrading and the GISISC to shape the country’s gas industry.
58
Climate
Change and Us
CHAPTER 6.1
CLIMATE CHANGE AND US
The Undeniable
association
with Carbon
Data from the National Environment Agency points to the
fact that the power sector is a dominant contributor of carbon dioxide emissions in Singapore, contributing close to
50% of the total carbon dioxide emissions from primary
energy consumption sources. PowerSeraya’s internal
projections also show that the power sector will continue
to be the major contributor of carbon dioxide emissions in
the next two decades given the resource constraints and
the lack of renewable energy options in Singapore at the
moment. With Singapore’s pledge to cut its carbon emissions by 16% below business-as-usual levels by 2020
(contingent to an international binding, post-Kyoto climate
change treaty) at the recently concluded Copenhagen
summit (COP15) on climate change, this underscores
the important and continued role that PowerSeraya has
to play in climate change mitigation for the long-term as
it would impact the present as well as future generations.
“PowerSeraya has embarked
on a path in response to climate
change by enhancing the efficiencies of our power plant operations and shifting to cleaner
fuels such as natural gas.”
Above data is from the National Environment Agency as provided in
Singapore’s National Climate Change Strategy paper.
60
CHAPTER 6.1
The Undeniable
association
with Carbon
The Singapore Climate Change Strategy paper published
in 2007 concluded that the use of less carbon-intensive
fuels (e.g. natural gas and renewables) and energy efficiency improvements would be key to mitigating GHG
emissions. This echos our company’s shift to greater use
of natural gas as well as the efficiency improvements that
have been made at our power generating units. For the
2000 to 2009 period, we improved our overall plant efficiency by almost 10%. In addition, the share of energy
units generated from natural gas leap-frogged to about
45% in FY2003/2004 with the inception of the company’s
very first natural-gas fired combined cycle power plant.
Since then, we have managed to increase this share by a
further 4% over seven years. This has resulted in significant improvements in our carbon dioxide emission figures
– an estimated 32% reduction in CO2 tonnes and an estimated 20% reduction in carbon intensity over the 2000 to
2009 period (see Diagram 3.1 for details).
It has also resulted in the delivery of social goods such as
good air quality for the surrounding community. This would
not have been possible without the deliberate attempt to
develop our business sustainably with due regard given to
profits, the planet as well as social good. We firmly believe
that our increased use of natural gas and our investment
in more energy efficient equipment will continue to allow
our company to remain profitable over the long-term. At
the same time, it allows us to care for the planet and deliver society’s needs which include ensuring the healthy
employment of our workforce, delivering reliable electricity to our customers as well as contributing to the energy
security of the nation.
The on-going development and execution of our company’s integrated energy strategy has also allowed us to
grow with sustainability in mind. The recent actualisation of
this strategy is the recent modification works to our existing natural-gas fired combined cycle power plants (blocks
10 & 20) to produce steam and electricity at the same
time. It also aligns with one of the Sustainability Blueprint
of Singapore’s goals to achieve resource efficiency.
61
CHAPTER 6.1
The Undeniable
association
with Carbon
From the original intent of producing electricity as the sole
product from the combined cycle power plants, we were
able to harness the waste heat from the electricity generation process to produce steam using water from our desalination plant. By combining the prudent use of resources and the deployment of existing technologies, we were
able to innovatively integrate our existing assets and, in
so doing, increase the efficiency of blocks 10/20 from an
estimated 50% to about 80%, develop our capability to
supply steam to our customers and create an additional
revenue stream for the company. Moreover, the production of steam through the integration of existing assets is
a more cost effective and less carbon intensive solution
compared to a standalone investment solely to produce
steam. A win-win achievement for the planet, people as
well as profits.
Diagram 6.1: C02 emissions over the 2000 to 2009 period
62
CHAPTER 6.2
Occasionally PowerSeraya is unable to fulfill our customer’s demand for electricity and would need to purchase
electricity from the EMC (Electricity Market Company). The
extra electricity demand purchased from external sources
contributes to our indirect sources of carbon dioxide emissions (i.e. Scope 2 emissions as per GHG Protocol). For
the period FY2006/2007 to FY2008/2009, the proportion
of electricity purchased from external sources versus the
electricity generated from our plants was in the 9.0% to
11.9% range. The corresponding carbon dioxide emissions over the same period is 1,686,073 tonnes. (Based
on the 2008 Electricity Grid Emission Factor (Simple Operating Margin) of 0.5016 kg CO2/Kwh from the National
Environment Agency, Singapore).
Indirect
sources of
carbon dioxide
emissions
Our corporate HQ is an office lease premise covering one
and half floors of HarbourFront Tower One. It consumes
an average of 438,982 Kwh of electricity per year in the
period 2007 to 2009. The corresponding carbon dioxide emissions resulting from the electricity consumption
works out to an average of 220 tons per year. Further details on this can be found in Chapter 7 : Environmental
Performance.
To date, we do not track indirect carbon dioxide emissions
arising from other corporate activities (i.e. Scope 3 emissions as per GHG Protocol) such as company travel and
are thus unable to report any information on them.
63
CHAPTER 6.3
At PowerSeraya, we take a holistic approach towards
carbon. Besides reducing carbon dioxide emissions at
source by switching to less carbon intensive fuels, coupled with our continuous drive to achieve the highest possible efficiencies for all power generating units, we also
consciously work with customers and staff to reduce enduser energy consumption. This is done by raising awareness on energy conservation and providing call-for-action
initiatives to educate people on using less energy in efforts to reduce GHG emissions. For details please refer to
Chapter 8 : The Environment and the Community.
Carbon dioxide
reductions
at source,
production
and end-use
64
CHAPTER 6.4
In developing its CSR Strategy in 2008, the company
highlighted carbon risk as one of the challenges facing
the organisation in the future. The growing global agenda
on climate change places pressure on all national governments to act responsibly in slowing down the rate of
global warming and thus avert the diasastrous affects that
climate change can have for future generations.
Taking Carbon
Risks into
Consideration
The carbon risks that governments face may eventually
filter down to businesses either in the form of carbon tax,
cap and trade mechanisms or incentives for low carbon
businesses practices, cleaner energy technology adoption – all to mitigate the effects of climate change. No
matter what form these carbon risks may present itself in
the future, it will have a certain degree of impact to PowerSeraya. It is with this recognition of future carbon risks
that PowerSeraya is constantly exploring the adoption of
cleaner energy technologies and practices, measuring its
carbon footprint and keeping updated on the latest global
and local developments in climate change.
With the renewable energy constraints that Singapore
currently faces, the country is projected to be dependent
on fossils fuels for sustainable growth in the future. The
country’s power generation sector has shifted from heavy
fuel oils to greater use of natural gas over the years, as is
the case with PowerSeraya. Looking ahead, natural gas
will increasingly be the main fuel used in PowerSeraya’s
generation operations in years to come. Our projected dependence on natural gas in future years does, however,
present economic challenges in the long-term.
In the World Energy Outlook 2009 by IEA, it is forecasted
that demand for natural gas worldwide is set to continue
its long-term upwards trend with the power sector being
the biggest driver of gas demand in all regions. However,
the cost of developing new sources of natural gas is set to
rise over the long-term even as the world consumes available natural gas resources over time.
65
CHAPTER 6.4
Taking Carbon
Risks into
Consideration
Moreover, the recent financial crisis has cast a shadow
over energy investments to fulfill growing energy needs in
the next few years. The fragile financial markets in the USA
and Europe, the badly embattled banks in these countries
and stricter regulation of the banking system may well
limit or constrain the lending capacities of these banks especially for some years to come. This runs the risk of companies choosing cheaper, more carbon intensive energy
investments because of the limited financing options for
more expensive but cleaner energy investments. The carbon risks of such a scenario is high and does not augment
well for power generators like PowerSeraya that aims to
grow its business in manner that is both economically and
environmentally sustainable.
Looking on the bright side, the technology advances in
renewable energy does also provide some hope to the
carbon risks faced by Singapore and power generators
like PowerSeraya. This is echoed by the IEA in the recent
World Energy Outlook 2009 publication which indicated
that the continued exploration in the renewables space
coupled with technological advances and the process of
commercialisation will make it a possible and sustainable
solution in the medium- to long-term.
Indeed, some of the recommendations of the recent Economic Strategies Committee (ESC) is for Singapore to
explore coal and nuclear as future energy sources given
the energy security issues that confront our small nation.
PowerSeraya, as one of major power generating companies that currently supplies close to 30% of the country’s
energy needs, will also find itself in a similar situation of
evaluating options to meet the country’s future energy
needs. The challenge is finding the appropriate balance
to grow the company while taking care of the environment
in a sustainable manner in the years ahead.
66
CHAPTER 6.5
PowerSeraya has invested in a new 800MW combinedcycle power plant (CCPP) which will deliver potential carbon dioxide emission reductions of about 10% from current levels when it is fully operational in 2010.
We are in the process of getting this project CDM (Clean
Development Mechanism) registered with the UNFCCC
as of March 2009. A stakeholders’ consultative session
was conducted to gather feedback from the general public regarding this project. The topics raised and answered
during this session can be found on our corporate website1.
1
Investments in
Sustainable
Development
. http://www.powerseraya.com.sg/index.php?option=com_con
tent&task=view&id=53&Itemid=13
Further details of this project can be found on the UNFCCC
website*.
*https://cdm.unfccc.int/Projects/Validation/DB/SGP0QXF9O1ZSA7UYRDJB0LSIJ88JB3/view.html
67
Environmental
Performance
CHAPTER 7
ENVIRONMENTAL PERFORMANCE
At PowerSeraya, we take an integrated approach towards
environmental sustainability. Besides environmental performance at our plant which is largely governed by our
QHSE policy, our company also tries to walk the talk by
monitoring our office resource consumption and organising regular internal initiatives to educate staff on environmental issues.
ENVIRONMENTAL
PERFOMANCE
In addition, we enter into collaborative relationships with
external stakeholders to raise environmental awareness
to the community. Our internal initiatives with staff and
our external activities involving the community on environment is driven by our Environmental Policy under our
CSR Vision. It covers more non-compliance aspects of
the environment such as educating the community to be
responsible agents for the environment as well as adopting voluntary business practices that promote sustainability.
“PowerSeraya takes a holistic approach towards environmental sustainability beyond
its power-plant operations, to
include our employees in the
workplace and our customers,
as well as the community.”
69
CHAPTER 7.1
7.1.i
ISO 14001 & EMS –The Backbone of Environmental Performance at the Plant
In the daily operations of a power plant, a considerable
amount of fuel and chemicals are being consumed and
several hazardous chemicals are produced as waste in
the process of producing electricity and utilities such as
steam to our customers. To minimise damage to the environment and the ill effects that these substances bring
to our health, we need to keep our environmental performance at a high level.
Caring for the
Environment at
our Plant
Operations
Driving the environmental performance of our plant is the
ISO 14001 environmental management system which is
a process that has been established at our plant since
2005. The environmental impacts for each and every environmental aspect is identified and assessed before it is
entered into the Significant Environmental Aspect Register. Action plans encompassing procedures, mitigation
measures and target objectives are then drawn up for every significant environmental aspect for control purposes
and for subsequent implementation. The environmental
aspects and their associated actions plans are then communicated to all relevant staff.
For monitoring purposes, environmental indicators are
tracked against objectives and reported on a monthly
and quarterly basis at the department/group and senior
management levels respectively. On an annual basis, a
management review of the environmental objectives and
EMS procedures is conducted as part of the continuous
improvement cycle.
70
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Every year since obtaining the ISO 14001 in 2005, our
company has been successful in maintaining its certification status. In the latest surveillance audit exercise done
in 2H 2009, no major non-conformance items were found
in our ISO 14001 systems when an audit was conducted
by the independent auditor, SGS. Some of the positive
remarks made by SGS during the recent re-certification
exercise were:
•
Records are updated, readily available and
retrievable during the entire audit.
•
Staff commitment in maintaining the Quality and Environmental management system is observed.
•
Comprehensive Utilities Group Environmental Programme Initiatives (E.g Reduction of CO2 &
SO2 emission, water and electricity consumption)
were observed.
71
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.ii
Identification Process for Environmental Aspects
How we arrived at our list of Significant Environmental Aspects
The risk level of each environmental aspect is ascertained
based on criteria such as the legal requirement, severity
of environmental impacts and the likelihood of occurrence
(taking into account the frequency of aspects occurring and
existing control measures) and is mapped into a severitylikelihood matrix to determine whether a particular aspect is
entered into the Significant Environmental Aspect Register.
We then develop action plans to control or mitigate each significant environmental impact based on the risk level of the
corresponding environmental aspect, taking into consideration other factors such as the feasibility of control/mitigation
measures as well as operational, financial and technological
constraints.
Table7.1.ii : Environmental Aspects And Corresponding Environmental impacts
72
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
GRI Environmental Indicators
We found that it was material that our list of GRI environmental indicators cover the main environmental aspects
from the Significant Environmental Aspect Register to
cover all the elements of air, land and water.
SO2, CO2 and HCFC (i.e. hydrochlorofluorocarbons) are
significant air emissions arising from our business operations and are thus featured in this report. The latter two,
in particular, were chosen due to their association with
climate change.
With regard to water pollutants, we reported the major
compliance-related pollutants such as biological oxygen
demand and chemical oxygen demand which are bounded by law, as well as oil-spill incidence. We have also
included water consumption arising from our business operations in the context of how our water desalination plant
aligns with Singapore’s focus on water self-sufficiency.
For land pollutants, we included hazardous wastes as
there is a fair proportion of the former which is treated
and shipped internationally under the Basel Convention.
We also included non-hazardous wastes and highlighted
how our waste recycling rate contributes positively to the
country’s drive to increase the waste recycling rate in efforts to extend the lifespan of our landfills.
This year we included indicators on biodiversity explaining the context in which biodiversity law is being applied in
Singapore and how it is relevant to our operations.
73
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.iii
Organisational Responsibility
The QHSE Steering Committee and QHSE Working Committee are responsible for developing, implementing and
improving the ISO 14001 EMS (Environmental Management System) along with other management systems (i.e.
quality, health & safety). These committees were established under the QHSE Policy which is endorsed by the
CEO of the company.
The main tasks of these two committees are to establish
and review the QHSE policy and the environmental objectives. In addition, these committees ensure the availability of resources to administer the EMS and conduct
management reviews on a regular basis as part of the
continuous improvement cycle. In general, each department/section head holds operational responsibility for the
environmental management system for their respective
areas and works closely with the QHSE Working Committee to address all environmental aspects arising from the
business operations.
The organisation charts for the QHSE Steering Committee and QHSE Working Committee are provided below to
illustrate the leadership and commitment to environmental performance.
74
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Diagram 7.1.iii(a) QHSE Steering commitee
Diagram 7.1.iii(b) QHSE Working commitee
75
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.iv
Fuel Consumption
Graph 7.1.iv(a): Fuel Oil Consumption (FY06/07 to FY08/09)
Graph 7.1.iv(b): Natural Gas Consumption (FY06/07 to FY08/09)
76
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Natural gas consumption declined by 6.7% in FY2008/2009
over the previous year. The decay of natural gas pressure
in FY2008/2009 resulted in our natural-gas fired plants
being utilised less than planned. In 2009, there were more
than 150 incidents of low natural gas pressure which disrupted the smooth operations of our natural-gas fired
plants.
Fuel oil consumption dropped by 4.1% in FY2008/2009
compared to the previous FY. This drop would have been
greater if not for the decay in the natural gas pressure
which necessitated the changeover from natural gas to
diesel oil to fulfill regulatory requirements.
Note: Fuel oil refers primarily to heavy fuel oil and intermediate fuel oils. However, the figures include a very small
proportion of diesel oil which is used for contingency and
peaking purposes.
In PowerSeraya’s context, our direct and primary source
of energy used for our business (i.e. electricity consumption) is from the fuel oil and natural gas that we use/consume (we measure this in Tonnes or BBTU rather than
Joules).
77
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.v
Indirect Energy Consumption by energy source
From time to time the company has to purchase electricity
from external sources to fulfill the energy demands of our
customers. In the period FY 2006/2007 to FY 2008/2009,
the proportion of energy purchased from external sources
was about 9.5% on average.
Graph 7.1.v: Indirect Energy Consumption (FY06/07 to FY 08/09)
Since electricity consists of energy produced from various primary sources, we are unable to report the energy
consumed by these energy sources. However, from the
latest FY 2008/2009 Annual Report of the Energy Market
Authority of Singapore, the country’s fuel mix for electricity generation is 80% natural gas, 15.2% fuel oil and 4.5%
from other fuel sources.
78
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.vi
Emissions
Carbon dioxide emissions
Carbon dioxide intensity (a measure of the amount
of CO2 tons emitted per unit of power generated) for
FY2008/2009 increased by less than 1% to 0.587 tons/
MWh from the previous FY. The challenges faced by the
high frequency of low natural gas pressures (which is a
factor that is beyond the company’s operational control)
resulted in lost opportuni ties for the company to use less
carbon-intensive natural gas to generate electricity. The
low natural gas pressure incidents also meant that our
natural-gas fired plants had to change over from natural
gas to diesel fuel on various occasions. All these factors
resulted in our plants burning less natural gas than originally planned and thus resulted in the slight rise in carbon
dioxide intensity in FY2008/2009.
Looking ahead, our carbon dioxide intensity should maintain or experience a slight drop in FY2009/2010 before
we see some significant decreases in FY2010/2011 when
our new 800MW natural-gas fired Combined Cycle Cogeneration plant becomes fully operational in 2010/2011.
79
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Graph 7.1.vi (a) : Carbon Intensity Figures from FY 2006/2007 to
FY 2008/2009
Sulphur Dioxide Emissions
Sulphur dioxide intensity (i.e. a measure of the amount of
SO2 tons emitted per unit of power generated) increased
from 0.0029 tons/MWh in FY2007/2008 to 0.0034 tons/
MWh in FY2008/2009. This was despite an increase in
the FGD (Flue Gas Desulphurisation) unit efficiency from
92.04% in FY 2007/2008 to 94.18% in FY 2008/2009.
The high frequency of low natural gas pressure incidents
which affected the smooth operations of our natural-gas
fired plants resulted in our steam plants being run more
frequently than originally planned. The use of fuel oil
(which has sulphur content) for the steam plant operations thus resulted in more sulphur dioxide being emitted
than intended.
Besides the low natural gas pressure incidents, the overhaul of our natural-gas fired plants, which lasted over 25
days in FY2008/2009, also meant that steam plants had
to double up to generate electricity to fulfill energy demand. This factor also contributed to the increase in the
sulphur dioxide emissions.
80
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Graph 7.1.vi(b): Sulphur Dioxide Intensity Figures from FY
2006/2007 to FY 2008/2009
Reducing Sulphur Dioxide Emissions using the FGD
(Flue Gas Desulphurisation) unit
The fuel oil used in our power plant operations has a relatively high sulphur content which releases sulphur dioxide
into the atmosphere when burnt. Exposure to high levels of
sulphur dioxide can cause breathing problems, respiratory illnesses and cardiovascular disease. To mitigate these harmful effects, we burn fuel oils with no more than 2% sulphur
content in them, which is within National Environment Authority (NEA) requirements.
The resulting sulphur dioxide emissions go through a flue
gas desulphurisation (FGD) unit which removes over 90%
of toxic emissions. In fact in FY2008/2009, close to 95% of
the sulphur dioxide emissions where removed by the FGD.
Over the years, the company has made efforts to improve the
efficiency of the FGD unit from 92.92% in FY 2006/2007 to
94.18% in FY 2008/2009.
81
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Nitrogen Dioxide
We are unable to report on our nitrogen dioxide emissions
at this present moment because of the difficulties in measuring the actual amount of nitrogen dioxide from the boilers on a continuous basis. Moreover, there is also no flow
meter to capture the total flow of flue gas in order for us
to compute the total nitrogen dioxide emissions. However,
we have consistently kept the nitrogen dioxide levels below the regulatory limits set by the National Environment
Agency of 700 mg/Nm3.
Ozone-Depleting Emissions
There were no ozone-depleting emissions from our power
plant operations. However, our office air-conditioning emitted insignificant amounts of hydrochlorofluorocarbons of
between 135kg and 248kg in the period FY2007/2008
and FY2008/2009.
82
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.vii
Water
Overall water intensity improved at the power plant with
FY2008/2009 consuming about 0.170 m3 of water for
every Mwh of power generated. This is a 8.1% drop compared to the previous year.
Graph 7.1.vii: Water Intensity Figures from FY 2006/2007 to
FY 2008/2009
The proportion of desalinated water being used for power operations stands at 66% in FY2008/2009. Teething
problems associated with the desalination plant since it
started operations on 30 August 2007 resulted in a lower
proportion of desalinated water being used for operations
than originally planned. Nevertheless, our drive towards
greater water self-sufficiency will continue to see renewable water sources such as desalination water being used
for our power plant operations for many years to come.
83
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Wastewater Discharge
The process of power generation results in wastewater
that is treated appropriately before it is discharged into
the open sea. In fact, the wastewater undergoes stringent
quality checks for heavy metals, biological oxygen demand (BOD) and chemical oxygen demand (COD) to determine whether it has significant effect on fish or aquatic
plants.
The wastewater samples are taken bi-yearly and sent
to an accredited laboratory for tests. For the period
FY2006/2007 to FY2008/2009, the wastewater discharge
was in full compliance with the Environmental Protection
and Management (Trade Effluent) Regulations (2005).
The BOD and COD tests measure the relative oxygen
depletion effect of a waste contaminant. In FY2006/2007
and FY2007/2008, the BOD and COD tests of the treated
wastewater were less than 30mg/l and 100mg/l respectively. These are well within the regulatory limits.
Other significant substances contained in the trade effluent include Total Suspended Solids (TSS), Total Metals
and Oil and Grease. These substances are also monitored periodically to ensure that they are in compliance
with regulatory limits.
Our wastewater discharge to the open sea is constantly
kept within the 30°C regulatory limit to ensure that aquatic
fauna and flora are not significantly affected by high temperatures
84
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.viii
Waste and Disposable
A considerable amount of industrial waste is being generated at our power plants. As far as possible, we try to
recycle as much of this waste to minimise stress on our
country’s limited landfill space.
In FY2008/2009, 97,643 tonnes of waste were generated.
This included scrap metal, boiler slag, waste oil and general waste. All ash and sludge produced from the plant
operations are collected and treated before it is sent to
the landfill. All toxic wastes are treated in accordance with
local regulations before disposal.
As far as possible, waste materials are recycled to produce by-products that can be used by other industries. For
example, sulphur dioxide is recycled to produce gypsum,
which is sold to the cement companies and subsequently
used in the construction industry. In FY2008/2009, gypsum alone constituted about 89% of the total waste recycled at the plant.
The 87,069 tonnes of gypsum produced in FY2008/2009
is shipped overseas under the terms of the Basel Convention. The percentage of transported waste shipped
internationally in FY2008/2009 dipped slightly to 89.4%
from the previous FY’s figure of 90.3%.
Graph 7.1.viii
85
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.viv
Volume of Significant Oil Spills
In FY07/08 to FY08/09, PowerSeraya had no recorded oil
spills. A system involving the regular recording of oil spills
started in 2007. Previously, oil spills were only recorded
when an incident occurs. Nevertheless, we have an oilspill response plan, and every year we participate in the
annual oil spill exercise organised by Oil Spill Response.
This ensures that we are equipped to contain and minimize the environmental damage caused by an oil spill.
86
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.x
Materials Used by Weight or Volume
Unlike other industries where a significant of direct materials* are being used to manufacture products, PowerSeraya is in the business of producing electricity and steam
to our customers. As such, most of our raw materials are
non-renewable** such as fuel oil and natural gas. For
details on the quantity of fuel oil and natural gas that is
consumed by the company, please refer to ‘EN3 – Fuel
Consumption’ which is covered in the earlier part of this
Chapter.
Industrial gases as well as lubricants and grease are regular materials used by the company. Tables 7.1.viv(a) and
7.1.viv(b) captures the quantities of these two materials
used over the period FY2006/2007 to FY2008/2009 from
purchase orders. The top three industrial gases used in
the company are nitrogen, oxygen and acetylene. Nitrogen is commonly used for overhaul or restoration works
for the power generating units in the plant whereas oxygen and acetylene is used when hotworks are performed
for certain maintenance activities. Lubricants are widely
used in plant equipment with moving parts to effect working efficiency and reduce wear and tear.
Table 7.1.x(a) : Quantities of Industrial Gases used by the company
from FY 2006/2007 to FY 2008/2009
Note: 1% of the purchases orders for industrial gases cannot be accounted
as they are expressed in ‘cylinders’ (units of measurements) and are thus not
captured in the table above.
87
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Table 7.1.x (b): Quantities of lubricants & grease used by the
company from FY 2006/2007 to FY 2008/2009
Note: 3% of the purchases orders for lubricant & grease cannot be
accounted as they are expressed in ‘drums’ (units of measurements) and are
thus not captured in the table above
The company consumes other non-renewable materials
such as equipment, chemicals and consumables but we
are unable to report on their quantities used as our current operational systems are not optimally structured and
programmed in a manner that enables us to collate such
information in a productive way.
Our products that we sell to our customers are utilities like
electricity and steam which do not involve any packaging
material. As such, we are unable to report on information
pertaining to packaging material since it is irrelevant to the
company.
*Direct materials refers to materials that are present in a final
product.
** Non-renewable materials refers to resources that do not renew in short time periods, such as minerals, metals, oil, gas,
coal, etc.
88
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.xi
Recycled Input Materials
It is not common practice for Singapore companies to ask
suppliers to declare the amount of recycled content in the
materials that are supplied to them. PowerSeraya as a
Singapore-based company with no overseas operations
is no exception to this common practice.
However, the company has made small, conscious efforts
to impose sustainable criteria to our suppliers for the provision of some materials. They include the supply of office
paper from recognised sources such as the Forest Stewardship Council and the requirement for vendors to quote
and supply stationery with the Singapore Green Label (or
its equivalent).
89
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Our company recognises the advocacy role it can play
in the initial stages by influencing our suppliers/vendors
towards more sustainable practices even though the local market may not be ready to adopt it. In the months
of November and December 2009, a pilot initiative was
launched to encourage suppliers to make voluntary submissions of the sustainable procurement checklist (which
included questions about the recycled content of the materials supplied to the company) as part of the tender/
quotation submissions process. The responses to the initiative were encouraging with close to 40% (out of 18 suppliers) voluntarily submitting the sustainable procurement
checklist. The findings of the checklist submissions also
revealed the following:
•
About 15% set energy conservation targets and the same percentage manufactured (or distributed )
products using recycled materials.
•
A third of them publicly made available their environ
mental performance.
•
An estimated 43% have existing ISO 14001 environ
mental management programmes.
•
About 85% practiced some form of sustainable trans
port when they delivered their goods to our company.
•
Close to 30% practised green procurement
Through the above mentioned pilot initiative, it demonstrates that PowerSeraya is starting to look at the sustainability aspects of its supply chain and this sets the tone
for suppliers to start thinking likewise. Looking ahead, the
company hopes to make modest steps to push the envelope in the area of sustainable procurement.
90
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.xii
Compliance with Local Laws and Regulations
PowerSeraya works closely with government agencies
in particular the National Environment Agency (NEA) to
ensure that we keep all air emissions, wastewater discharge, hazardous wastes and other environmental impacts within the regulations stipulated by the Singapore
Government.
In the period FY2006/2007 to FY2008/2009, we had no
record of any monetary fines as a result of non-compliance with environmental law and/or regulations nor any
non-monetary sanctions.
The existing regulatory framework for Singapore for environmental protection consists of several regulations and
acts administered by the NEA for the following environmental aspects which are incorporated as part of our ISO
14001 processes:
• Air Pollution Control, for emission of pollutants
• Water Pollution Control, for the discharge of trade effluent
• Marine Pollution Control, for spillages into the marine enviroment
• Noise Pollution Control, for the control of environmental noise
• Waste Management, for the control of general and toxic
industrial waste, recyclable material and hazardous waste.
• Hazardous Substance Management, for the purchase, stor
age and use of hazardous substances
• Flammable Substance Management, for the storage of
flammable gases and liquid petroleum gas
• Explosive Precursors Management, for the storage and use
of explosive substances
• Water Supply Regulation, for resource conservation.
91
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
7.1.xiii
Biodiversity
Singapore is a tiny city-state with a population of close to
5 million residing on a small land mass of 710.2 km2 with
virtually no hinterland. This is unlike cities in other countries (e.g. Melbourne with a population of about 4 million
with a city area of 8806km2) that have huge rural areas
with high biodiversity value. Singapore, as one of the
world’s most densely populated areas in the world, faces
enormous challenges in urban planning and balancing
residential areas for its growing population, commercial
and industrial zones for economic activity and carving out
green spaces for recreational purposes. Recognising the
land scarcity challenges early on, the Singapore government has since incorporated green spaces into urban
planning to fulfill our Minister Mentor Lee Kuan Yew (formerly Prime Minister of Singapore)’s vision of developing
the country into a Garden City.
Till today, the Garden City vision still holds relevance
with the country’s aim to position itself as a global and
vibrant city that attracts human and financial capital. Having green spaces mitigates the harsh concrete environment and contributes towards a more liveable city state
that is able to provide recreational places for its residents
to enjoy, relax and be inspired. This has allowed Singapore to meet the lifestyle and recreational needs of an
increasingly sophisticated population, and enhanced Singapore’s attractiveness as a choice destination for foreign
businesses and talents.
92
CHAPTER 7.1
Caring for the
Environment at
our Plant
Operations
Prudent planning over the years has enabled Singapore
to increase its green cover from 35.7% to 46.5% between
1986 and 2007, despite the population growing by 68%
in the same period. Currently, close to 10% of the total
land area is set aside for parks and nature reserves. Singapore today has four nature reserves and two national
parks that are protected by legislation, namely the Parks
and Trees Act 2005. Besides these, there are also 22 nature areas that are covered under the Special and Detailed Controls Plan which is administered by the Urban
Redevelopment Authority. This is established under the
authority of the Planning Act. All the above areas are rich
in biodiversity.
In the context of PowerSeraya and its subsidiaries, its
power generating operations sit on land that is obtained
on a long-term lease from JTC Corporation, the industrial
landlord that is owned by the state. None of the land that
is occupied by PowerSeraya is protected by law for biodiversity nor is it adjacent to any protected areas or any of
the 22 nature areas mentioned above.
93
CHAPTER 7.2
Environmental sustainability is practised beyond PowerSeraya’s power plant operations to involve our employees in the workplace at the headquarters located at
HarbourFront Towers. We monitor our consumption on
a monthly basis. This Chapter covers our energy, paper
and water consumption figures as well as our initiative to
‘green’ our IT infrastructure. All figures in this Chapter are
on a calendar-year basis.
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
“We see ourselves playing an
important role in educating our
employees who will in turn become environmental advocates
to their families as well as the
community they live in.”
94
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
7.2.i
Office Resource Consumption
From the significant reductions achieved in 2008 for office resource use, the aim for 2009 is to maintain water
consumption at the same levels as 2008 and to achieve
a 1% reduction in energy use. For the first time, we have
made a commitment to reduce paper use by setting a 4%
reduction target on paper use.
On the whole, the 2009 office resource consumption performed reasonably well in most areas except for water.
Table 7.2.1(a) below summarises how the company fared
in its office resource use in 2009.
Table 7.2.i (a): Summary Table - Offlice Resource Performance Versus
Targets for 2009
The following Chapters detail the office resource consumption figures at the corporate headquarters unless
otherwise mentioned.
95
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Energy Consumption
The 2009 annual consumption per employee saw a 1.8%
increase over the previous year. This is slightly short of
the 1% reduction target. However, if compared against
the National Energy Efficiency 3(EEI) Index for office
buildings of 215 Kwh/sqm/per annum, our office energy
consumption (including the data centre) is well within this
benchmark figure.
Graph 7.2.i (b): Office Energy Consumption per employee per annum
(excluding data centre)
96
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Graph 7.2.i (c) : Office Energy Consumption per sqm per employee
per anumm
In terms of the indirect carbon dioxide (CO2) emissions
resulting from the office energy consumption, 2009 saw
a total of 223.7 tons of indirect CO2 emissions which is a
slight increase of 0.6% over the previous year.
(Note: The 2007 CO2 emissions is based on the 2007 Electricity Grid
Emission Factor (Simple Operating Margin) whereas the 2008 and
2009 CO2 emissions is based on the 2008 Electricity Grid Emissions
Factor (Simple Operating Margin) from the National Environment
Agency, Singapore).
Graph 7.2.i (d) : Annual CO2 emissions from Energy Use at
Corporate HQ
97
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Water Consumption
Water consumption per employee saw a 12.6% increase
in 2009 over the previous year. This is due to H1N1 pandemic flu in 2009 which resulted in a heightened awareness among staff to wash their hands frequently and maintain a high level of personal hygiene. We also ceased the
use of bottled water since August 2009 and this has led to
an increased use of the water dispensers that contributed
towards the elevated water consumption figure.
Graph 7.2.i (e) : Annual Water Consumption per employee for Office
98
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Paper Consumption
Paper consumption per employee for the entire company
saw a significantly decrease of 21.2% in 2009 compared
to the previous year. The monthly paper tracking system
which was established since April 2009 coupled with the
enforcement of paper quota by logical departments contributed greatly to the reduction in paper use from a high
of 8.4 reams per employee in 2008 to 6.6 reams per employee in 2009.
We are also happy to note that paper reduction achieved
in 2009 more than compensated for the higher cost of
using (i.e. paper from responsible forest management
sources certified by the Forest Stewardship Council)
which we started procuring since July 2008.
Graph 7.2.i (f) : Annual Paper Consumption per employee
99
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
7.2.ii
Greening IT Infrastructure
We have continued our efforts in greening our IT infrastructure by deploying virtualisation technology across
many more servers in our data centre. The virtualisation
technology has enabled multiple operating systems to run
concurrently on a single server instead of multiple servers. This saves electricity from running fewer physical
servers. It also means lower cooling requirements and a
reduction in office rental space. As of December 2009, we
have 110 virtual servers running on 11 physical servers.
This translates to an annual energy consumption savings
of close to 80% and an avoidance of approximately 175
tons of carbon emissions per annum.
Assumptions: The difference in the system utilisation of
the physical servers (i.e. without virtualisation technology assumed at 7%) and the VM servers (i.e. servers
using virtualisation technology, assumed at 50%) is used
to work out the energy savings. The power usage of the
physical server (i.e. without virtualisation) is assumed at
852 watts whereas the power usage of the VM servers
(i.e. with virtualisation) is assumed to be 1,225 watts. An
assumption was made that the server base load utilisation
is 50%, with the remaining 50% utilisation having a linear
relationship to the system utilisation. The carbon dioxide
emissions avoided is calculated from the energy savings
from the adoption of virtualisation technology. The 2008
Electricity Grid Emission Factor (based on Simple Operating Margin), which is publicly available on the National
Environment Agency web-site, is used to calculate the
carbon dioxide emissions.
Note: Kindly be informed that the CO2 emissions reported in
the previous sustainability report is based on slightly different
assumptions, namely i) the base load utilisation which was
20% reported previously and ii) The 2006 IPPC Guidelines for
the National Greenhouse Gas Inventories and the fuel mix data
from the Electricity Market Company Market Report 2007 were
used as a basis to calculate the carbon dioxide emissions in
100
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
7.2.iii
Internal Environmental Programmes
Throughout the year, the company organises environmental-related activities that seek to educate and galvanise
our staff into action. The company places importance in
internalising environmental-friendly practices among the
staff so they too can become advocates of the environment to the community they interact with.
Eco Bazaar
In January 2009, an eco bazaar was organised at HarbourFront Towers a week before Chinese New Year. At
the bazaar, items such as mini plants, stationery made
from recycled material and organic foodstuff were put on
sale. The main focus of the bazaar was to promote the
attributes of indoor air quality in the office through the use
of mini plants. Attractive incentives were provided in the
form of discounts for the purchase of plants to encourage
staff to own one. In addition, staff who wore green attire
at the bazaar were given token gifts for their support on
the green message. Overall, the bazaar drew a good response where close to 50% of the staff purchased at least
an indoor plant.
101
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Earth Hour
Every year since the inception of the Earth Hour Initiative
(which usually falls on the last weekend of March), our
company has brought this initiative to our staff by organising it during a work day. On 27 March 2009, our offices
(including a few offices at our power plant) had our lights
turned off at 11am. During the lights-off period, staff was
encouraged to take advantage of natural lighting to do
their work by rolling up the window blinds. A lunchtime
awareness talk on energy conservation was organised
and this was followed by energy efficiency games which
provided useful tips that staff could pick up from in a fun
way .
Plastic Bottle Recycling campaign
To raise awareness on the issue of plastic bottle recycling, the company organised a month long campaign to
collect used plastic bottles in our office. During the period
24 June to 25 July 2009, an estimated 250 used plastic
bottles were collected and subsequently recycled to construct a feature wall of the Energy Learning Hub (refer to
Chapter 8.1) of our adopted school, Greenridge Secondary School.
102
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Sustainability in a Glass Jar
In October, a terrarium workshop was organised at our
corporate headquarters to get staff to learn about sustainability in a fun way. The workshop, which received
an overwhelming response, was led by Mr. Lee, a teaching staff from our adopted school Greenridge Secondary
School.
During the workshop, staff were given an introduction of
the origins of terrariums as well as the natural cycles at
play within the tiny ecosystem enclosed within the glass
jar. This was followed by a step-by-step demonstration
of the terrarium making process starting from the development of the pebble layers, the transfer of soil and mini-plants into the glass jar and finally the watering cum
cleaning process. The 20-odd staff who participated in the
workshop demonstrated patience and creativity as they
conscientiously crafted their terrariums. Staff also had to
write a 50-word sustainability message describing how
they felt about the workshop as well as explaining the linkage between terrariums and sustainability to win the ‘Best
Sustainability Message’ contest.
To involve the participation of those who couldn not take
part in the workshop, the terrariums made by staff were
displayed in the office for a week. Staff were then invited to guess the terrarium of choice selected by our CEO
John Ng (with mystery prizes to be won).
103
CHAPTER 7.2
ENVIRONMENTAL
PERFORMANCE IN
THE WORKPLACE
Eco-Gift Competition
During the festive month of Christmas, we organised an
environmental initiatives centered on the recycling theme.
In conjunction with the Christmas Eve party at our corporate headquarters, an eco-gift competition was held to get
staff to use recycled office materials to creatively wrap
their gift exchange presents. Altogether, a total of more
than 30 staff took part in the competition to vie for the top
three prizes.
The employee who garnered the top prize had creatively
wrapped her present using photocopier paper and even
took pains to minimise the use of adhesive tape by using
string from a used shopping bag to hold the gift package.
The competition was aimed at getting staff to do something fun while caring for the environment at the same
time.
104
The Environment
& The Community
CHAPTER 8
THE ENVIRONMENT & THE COMMUNITY
Environment &
The Community
“One of the major community
investments is the establishment of the Energy Learning
Hub at PowerSeraya’s adopted school premises.”
PowerSeraya regards the community as one of its important stakeholders and has organised several activities to
engage them on environmental issues. Our activities with
the community are aimed at raising environmental awareness among the general public. It also presents opportunities for us to share with the community about our business and how we deal with the environmental impacts of
our plant operations. Through our engagement with the
community, they can better understand how we deal with
day-to-day environmental issues as well as our role in
climate-change action. Our social investments are largely
channelled to provide assistance to union members and
their families as well as to nurture the talents of youths
through our annual book prizes and our on-going scholarship programmes.
In FY2008/2009, PowerSeraya’s community investments
saw a significant jump compared to the previous year.
One of the major community investments was the establishment of the Energy Learning Hub at PowerSeraya’s
adopted school premises.
106
CHAPTER 8
Environment &
The Community
Graph 8(a) : Pie chart showing community investment compostion
Graph 8(b) : Breakdown of community investments made by
the company
107
CHAPTER 8.1
Besides the significant investment in the Energy Learning Hub at our adopted school Greenridge Secondary, the
company also supports environmental causes by sponsoring conferences, talks and seminars, as well as donating to environmental NGOs and schools. In addition, we
also collaborate with external parties to bring about greater environmental awareness. Our initiatives with the community are driven by the Environmental Policy Statement
of the CSR Policy which states the company’s commitment towards educating the community to be responsible
agents to the environment. In FY08/09, close to 60% of
the community investments are environmental in nature.
The environmental initiatives mentioned below are up to
the period ending December 2009.
Environmental
Investments
“The Energy Learning Hub
marks a significant milestone
for PowerSeraya in promoting environmental stewardship
to students not only within the
school, but also to students
from the other 10 schools in the
same cluster as well as to the
wider community”
Energy Learning Hub – Singapore’s first energy-centric learning hub by an energy company for youths
On 14 August 2009, the Energy Learning Hub (ELH) was
finally launched at the premises of PowerSeraya’s adopted school Greenridge Secondary School. Dr. Teo Ho Pin,
Mayor of the North West District and Member of Parliament for Bukit Panjang, graced the launch event as guestof-honour, As the sole sponsor of the ELH, its opening
marks a significant milestone for PowerSeraya in promoting environmental stewardship to students not only within
the school, but also to students from the other 10 schools
in same school cluster as well as to the wider community.
108
CHAPTER 8.1
Environmental
Investments
Built at an estimated cost of $170,000, the ELH seeks
to highlight the relationship between energy, the environment and climate change. Its point of differentiation lies
with its main focus on energy – bringing students through
a learning journey on energy sources, energy production and the importance of sustainability. The Hub raises
awareness about how decisions made today can influence
the energy future we have tomorrow and in so doing, inspire students to be responsible energy users themselves
to mitigate the effects of climate changeAs of December
2009, close to 1,100 students, teachers and parents have
visited the ELH since its launch in mid-August 2009.
Energy Trail
109
CHAPTER 8.1
Environmental
Investments
Possible effects of climate change
Virtual Gaming
110
CHAPTER 8.1
Environmental
Investments
1 Degree Up Challenge
For the second consecutive time, our company organised
the 1 Degree Up Challenge in celebration of World Environment Day which fell on 5 June 2009. This is an annual
initiative jointly organised by our company and our landlord, Mapletree. It calls upon all office tenants in HarbourFront Towers to raise their office temperature by 1 degree
with the primary objective of spreading the message of
climate change through energy conservation action.
Besides having a poster campaign to raise awareness on
this initiative, a mini exhibition cum energy conservation
games was organised at the lobby of HarbourFront Tower
One, drawing interest from office workers as well as passer-bys such as tourists.
Similar to the previous year, the initiative was well received. A participation rate of close to 70% was received
– this covered close to 3,000 office workers from the 40
companies located in the office towers.
111
CHAPTER 8.1
Environmental
Investments
Asia Youth Energy Summit
Held over the last two days of October 2008, the Asia
Youth Energy Summit 2009 aimed to provide a platform
for youths to discuss on clean energy issues and sustainable development. This event, with PowerSeraya as a
major sponsor, saw a large turnout of over 300 participants which included 33 foreign delegates from ASEAN,
China, India, Denmark and USA. Held under the theme
of “Opportunities and Challenges for Clean Energy & Energy Efficiency in Asia”, the summit covered a diverse
range of topics which included keynote speaker Mr Dipal
Chandra Barua, Managing Director of Grameen Shakti.
Grameen Shakti is a renewable energy company that won
The Right Livelihood Award for providing affordable and
climate-friendly energy for the rural poor in Bangladesh.
In addition to the main conference, a job fair and exhibition was held to give the participants and members of the
public an idea of the opportunities available to them in the
area of clean energy and sustainable development.
112
CHAPTER 8.1
Environmental
Investments
NEA-Mediacorp Semakau Run
Previously known as the Semakau CEO Run, this annual
event has garnered PowerSeraya’s support since its inception three years ago. In 2009, PowerSeraya donated
a sum of S$12,000 to this fund-raising run in support of
the works of environmental NGOs as well as social services charities namely the Singapore Environment Council, the Singapore Institute of International Affairs Haze
Programme, the Restroom Association of Singapore,
HCA Hospice Care, NTUC U Care Fund and the Rainbow
Centre – Yishun Park School. PowerSeraya’s CEO has
participated in this run along with a few of the company’s
employees, which is held every year on Pulau Semakau,
Singapore’s offshore landfill island.
113
CHAPTER 8.1
Environmental
Investments
Clean and Green Singapore 2009
PowerSeraya has been a sponsor of the Clean and Green
Singapore event – the country’s largest environmental
event organised annually by the National Environment
Agency (NEA) – for two consecutive years now.
The launch of the event on 31 Oct 2009, which was
graced by Prime Minister Lee Hsien Loong, saw the company sponsoring among others, an energy conservation
themed game booth and notebooks made from paper
manufactured from sustainable forest sources endorsed
by the Forest Stewardship Council.
PowerSeraya also participated in the Schools’ Carnival
by sponsoring a booth for our adopted school Greenridge Secondary School to showcase their environment
initiatives. The Schools’ Carnival is one of the significant
events organised under the umbrella of the Clean Green
Singapore, which is aimed at raising the awareness of environment among school children. For its participation, the
company received a plaque by NEA in recognition of its
joint partnership with Greenridge Secondary School under the Corporate And School Partnership (CASP) programme.
114
CHAPTER 8.1
Environmental
Investments
Collaboration with Nokia on the ‘Recycle A Phone,
Adopt A Tree’ Programme
For the first time, PowerSeraya collaborated with Nokia
to bring the ‘Recycle a Phone, Adopt a Tree’ programme
to the wider community within the vicinity of its office at
HarbourFront Towers. Organised in partnership with Mapletree, this two-month campaign (held from mid August
to end October 2009) helped to raise awareness on the
environmental benefits of phone recycling.
A booth was set up for a week at the busy shopping belt
of HarbourFront Centre to educate the general public on
the process of phone recycling and how it can help save
the earth.
Under this campaign, Nokia will plant a tree in Indonesia
for every phone recycled. A total of 353 mobile phones
and related accessories were collected for recycling after
the campaign ended.
With this campaign, used mobile phones sent for recycling
not only help prevent any environmental hazards caused
by the improper disposal of mobile phones but also help
to reduce carbon dioxide emissions through carbon sinks
created from trees planted by Nokia.
115
CHAPTER 8.2
Our social investments in FY2008/2009 saw an estimated
S$130,000 spent on 10 initiatives, including contributions
towards the UPAGE (Union for Power & Gas Employees)
Endowment Fund and our matching dollar donations for
the twin disasters Sichuan Earthquake and Cyclone Nargis.
Twin Disaster Donation Drive
Social
Investments
In May 2008, a donation drive involving employees of
PowerSeraya was initiated to raise money for the victims
of the Cyclone Nargis tragedy in Myanmar and those impacted by the Sichuan earthquake in China. With the company matching the funds raised dollar-for-dollar, close to
S$18,000 was raised and donated to the Singapore Red
Cross. The funds went towards the Singapore Red Cross’
relief and recovery efforts in the disaster-hit areas. This
included purchasing urgent medical supplies, relief items
like tents and even basic necessities such as food and
water for the victims so as to safeguard the health and
safety of thousands of survivors.
116
CHAPTER 8.2
Social
Investments
Celebrating Family Day with the Intellectually-Disabled from Metta.
As part of the company’s efforts to reach out to the socially disadvantaged, PowerSeraya invited the Metta Welfare Association for the first time to be part of its bi-annual
Family Day celebrations.. Five staff volunteers hosted 27
members and their families from Metta Activity Centre,
which runs programmes for intellectually-disabled people
to help them develop daily living skills. Our staff volunteers assisted the Metta members with their lunch and
guided them through the many game booths and activities
that were organised during the event.
117
CHAPTER 8.2
Social
Investments
Volunteering time for children of Child@Street 11
On 20 February 2009, 14 of our staff volunteers accompanied a group of children from Child@Street 11 to the
Singapore Zoological Gardens, in an outing organised by
EMC (Energy Market Company). As part of our annual
social outreach programme, PowerSeraya, together with
companies in the same industry – under the umbrella of
NEMS (National Electricity Market of Singapore) Group –
spent a fun-filled morning at the Zoo with 35 children from
Child@Street 11, a child-care centre that provides care
for low-income and/or dysfunctional families.
118
CHAPTER 8.2
Social
Investments
Contributions to UPAGE (Union for Power & Gas Employees)
In FY2008/2009, PowerSeraya donated a combined
sum of $77,000 to the UPAGE Endowment Fund and the
UPAGE Bursary Awards. The UPAGE Annual Bursary
Awards are awarded to the children of UPAGE members,
based on their academic performance and the financial
needs of the family (the latter is based on the member’s
family per capita income). The UPAGE Endowment Fund
was set up with the support of unionised companies under
its care (including PowerSeraya) to provide an additional
source of funds that will help union members in the form
of subsidies and benefits such as welfare grants, leadership and training and development courses.
In early 2009, PowerSeraya also donated $7,000 to the
NTUC U Care fund to help lower-income workers and
their families who were impacted by the recession caused
by the global financial crisis. The funds helped ease their
living expenses which included transport and utility vouchers for workers, and education-related vouchers for their
children (as disbursed in previous years). The Labour
Movement had also put aside funds for retrenched workers affected by the recession.
119
CHAPTER 8.2
Social
Investments
Staff’s Contribution to the Needy through the SHARE
programme
PowerSeraya subscribes to the SHARE (Social Help and
Assistance Raised by Employees) programme, where
employees give to the Community Chest on a monthly
basis through their salary. Our support for the SHARE
programme saw PowerSeraya being awarded the Silver SHARE award in FY2008/2009. This is a milestone
achievement compared to previous years where the company attained a Bronze award. For FY2008/2009 (i.e.
year ending March 2009), the proportion of staff who were
SHARE contributors rose to 60%, a 6% jump over the previous year.
The Community Chest is a fund-raising arm of National
Council of Social Service with the purpose of ensuring
that every person has the opportunity to live a life of dignity to his or her fullest potential .
(The contributions made through the SHARE programme
are not included in the social investment figures shown in
this report as these are direct contributions made by employees and not by the company).
Learn about our other social investments that recognise
and nurture the talents of youths (refer to Chapter 9.3).
120
Social Performance
-Promoting a Safe,
Healthy and Nurturing
Environment
CHAPTER 9
PROMOTING A SAFE, HEALTHY AND NURTURING ENVIRONMENT
Besides ensuring that our employees have a safe working
environment, the company places emphasis on creating a
culture that will allow our employees to achieve a healthy
work-life balance. Our staff are also given opportunities
to develop themselves through training. All these factors
contribute towards a vibrant and nurturing environment
where human capital can be groomed to be effective contributors in the organisation.
Promoting a
Safe, Healthy
and Nurturing
Environment
“Besides providing a safe and
healthy work place for our staff,
PowerSeraya has been creating a vibrant and nurturing
environment where there are
ample opportunities for staff
to develop, as well as enjoy a
good work-life balance.”
Occupational health and safety is an important aspect of
our power plant operations and this regulated system has
played a vital role in maintaining our good safety record.
As a company certified with OHSAS 18001, we ensure
that our health and safety practices and systems adhere
to the most stringent global standards and adopt a proactive approach towards promoting and communicating
safety awareness at the plant.
The company’s core value of ‘Nurture’ also extends beyond
our employees to the community through programmes
that provide opportunities for youth to grow academically
and contribute to society.
122
CHAPTER 9.1
The company has a Quality, Health, Safety and Environmental (QHSE) Policy which outlines our commitment to
safety and health. Being certified with OHSAS 18001:1999
in November 2007 and having transferred to OHSAS
18001:2007 since June 2009 also means we have a system to identify safety and health hazards and risks as well
as procedures and measures (which are reviewed periodically) to prevent accidents and incidents. The local regulation with particular influence on the compliance measures
in OHSAS 18001 is the Workplace Safety and Health Act.
Workplace
Safety and
Health
“The safety measures and procedures at the workplace have
been effective in keeping the injury and fatality rates low in the
company. Safety awareness is
kept high among employees
as well as our contractors. All
these factors have contributed
to our good safety record.”
123
CHAPTER 9.1
Workplace
Safety and
Health
9.1.i
Our Safety Record - Rate of Injury, Loss Day and
Work-Related Fatalities
For the past three years (FY2006/2007 to FY 2008/2009),
our company has had no work-related fatalities. We also
managed to maintain a credible record in terms of injury
and loss days. Our rate of injury, measured by the average frequency rate (AFR*) and our rate of loss days, measured by the average severity rate (ASR*), is well under
the national average** over the same three-year period.
Besides staff safety, the company takes an active role
in managing contractors’ safety. Over the three years
(FY2006/2007 to FY 2008/2009), there have been no
work-related fatalities by contractors. The average severity rate (ASR) for contractors has also been under the
national average over the same three-year period. The
average frequency rate (AFR) for contractors registered
a significant improvement in FY2008/2009, with a decreased accident rate which was below the national average in that year.
Details of the AFR, ASR and work-related fatalities are shown in the
table below.
*AFR is the number of accidents per million man-hours worked and
ASR is number of man-days lost per million man hours worked.
**The national average figures were taken from the Workplace Safety
and Health Indicators released by the Ministry of Manpower Singapore and they are expressed on a calendar year basis versus the
company’s safety figures which are on a financial year basis.
124
CHAPTER 9.1
Workplace
Safety and
Health
9.1.ii
Workplace Safety Programmes
At PowerSeraya, we organise regular safety programmes
to educate staff as well as contractors about the importance of safety in their daily operations. Safety training
is included as part of the PowerSeraya’s overall training
plan. Staff attend courses such as first aid training, safety
for lifting supervisors and the confined space safety assessors training conducted at MOM (Ministry of Manpower)’s
accredited safety training centre.
The safety and health policies and regulations of the company are also communicated through handbooks that
are made available to every employee and contractor involved in plant operations. We believe that it is everyone’s
responsibility to take ownership of their own safety as well
as the safety of those working in the surrounding areas.
125
CHAPTER 9.1
Workplace
Safety and
Health
Annual Safety Week
The annual Safety Week held usually in March celebrates
the past year’s efforts that have contributed to the good
safety record of the company’s plant operations. The Safety Week will kick off with a ceremony where staff are given
certificates of appreciation for the safety programmes that
they have implemented in their respective work areas.
The Senior Vice-President (SVP) of the Utilities Group,
who is in charge of the entire power plant operations, then
shares the preceding year’s safety performance with both
staff as well as contractors, and goes on to announce the
safety theme and plans for the year. A week-long line up of
safety initiatives follows after the launch ceremony.
In 2009, an online safety quiz and a mobile safety exhibition were organised to increase awareness on safe work
practices and to educate staff and contractors on the
causes and preventive measures of accidents. A safety
video show was also screened at the cafeteria throughout
Safety Week to remind staff and contractors on adopting
safe practices in confined spaces and forklift driving as
well as lock and tag out procedures. Practical safety sessions were also organised to educate staff on the use of
fire extinguishers and how to perform first aid, with demonstrations on first aid and Cardio-Pulmonary Resuscitation (CPR) done by the St. John’s Ambulance Association.
126
CHAPTER 9.1
Workplace
Safety and
Health
Regular Safety Programmes and Exercise Drills
Besides safety week, regular safety programmes are
organised throughout the year to educate staff and contractors. In fact, new staff and contractors are required
to attend a safety orientation training programme prior to
starting work at the power plant. The Utilities Group also
conducts a bi-monthly Safety Drive, which is a series of
safety programmes mapped out by each department. Besides department-sharing sessions on safety activities,
the Health, Safety and Environment (HSE) Department
also invites external parties to conduct talks on safety and
health from time to time.
Every year a large-scale emergency evacuation drill is
held in the plant and it involves the participation of our
contractors. Prior to the drill, both staff and contractors
will attend meetings to familarise themselves with the
emergency evacuation procedures and routes. Through
this major drill exercise which is held on an annual basis,
employees and contractors were able to better appreciate
their respective roles and responsibilities in an emergency
evacuation situation which would serve them well should
an actual situation occur in the plant. The company has
also involved Singapore Civil Defence Force (SCDF) in
the drill to familiarise and test each other’s emergency response procedures and response timings. The recent fire
Evacuation Drill that was held on Thursday, 17 December
2009 saw a total of 132 staff and 214 contractors participating in the drill. The response time of 19 minutes by
staff and contractors was commendable given that it was
a better performance compared to the previous year’s exercise.
127
CHAPTER 9.1
Workplace
Safety and
Health
9.1.iii
Safety Culture Survey
To assess the effectiveness of our safety programmes and
gather feedback on our safety management practices, a
safety culture survey is conducted every year. The safety
culture survey comprehensively covers a wide spectrum
of safety topics such as the effectiveness of the overall
management of plant safety, the ownership that staff team
and staff supervisors have on safety matters, the communication aspects of safety, the extent to which safety
programmes have enhanced safety awareness and the
management of near-miss incidents.
In 2009, the safety culture survey saw the participation
of 235 staff and 200 contractors. The survey findings revealed that 89% of staff and 92.18% of contractors either
agree or strongly agree that PowerSeraya has implemented an effective safety management system. The survey
ratings is based on a rating scale ranging from 5 (Strongly
Agree) to 1 (Strongly Disagree). Compared to the previous year, the 2009 safety ratings by staff saw a marginal
1% drop which is a slight deviation from the OSH Committee target of achieving zero ‘neutral’ position (i.e. 2009 to
maintain the same levels as 2008).
Diagrams 9.1.iii (a): The 2009 Safety Survey Ratings by Staff
128
CHAPTER 9.1
Workplace
Safety and
Health
Diagrams 9.1.iii (b) : The 2009 Safety Survey Ratings - Staff who
Agreed or Strongly Agreed that the company implemented an
effective safety management system
Diagram 9.1.iii (c) : The 2009 Safety Survey Ratings by Contractors
129
CHAPTER 9.1
Workplace
Safety and
Health
9.1.iv
Occupational Health
Workplace Noise Hazards
Noise arising from the operations of the power plant is one
of the occupational health risks which may often be taken
for granted but it is one not taken lightly in the company.
Every year, all staff who operate in noisy environments
at the power plant (excluding staff in office desk-bound
roles) are required to undergo an audiometric examinations for early detection of hearing impairment.
Some of the measures to mitigate staff risk exposure to
unacceptable noise levels include the implementation of
noise control measures at high risk areas and the regular monitoring of noise levels. Work areas and machines
with excessive noise are identified and signs are posted
at such places to warn staff of the potential noise hazards,
highlighting the need to don hearing protectors in these
areas. To reinforce the importance of wearing hearing protectors, noise education talks are held on a monthly basis
to maintain a high level of awareness on the noise hazards and safety measures that staff should adopt.
130
CHAPTER 9.1
Workplace
Safety and
Health
Risks of Communicable Diseases to Workforce Stability
Protecting the workforce from the risks posed by the pandemic flu (e.g. H1N1 flu virus) is one of the enterprise risks
being identified by the company. The speed and reach in
which communicable diseases such as SARS and H1N1
has spread around the world in previous years has shown
to us the vulnerability that corporations can be subjected to when such diseases reach pandemic proportions.
This is especially so for power generating companies like
PowerSeraya which provides the essential service of supplying reliable electricity to fuel the country’s needs on a
round-the-clock basis.
As such, the company has business continuity plans in
place to minimise the spread of pandemic flu at the workplace. Some of the measures that have been incorporated in the business continuity plans include setting out
temperature-taking and quarantine/isolation procedures,
minimising contact between incoming/outgoing working
shifts if required and taking into account social distancing.
During the last outbreak of the H1N1 pandemic flu virus,
the business continuity plans were activated and implemented in alignment with the country’s alert level issued
by the Ministry of Health, Singapore. Temperature-taking
procedures were implemented at all entry points of the
organisation, measures were established to limit staff’s
overseas travel and they were educated on the importance of being socially responsible and to observe personal hygiene. A list of pandemic flu clinics in close proximity
of the workplace was also identified and communicated
to all staff to ensure that they knew where to receive the
nearest treatment should the need arise.
131
CHAPTER 9.2
PowerSeraya believes in having a healthy work-life balance as part of the strategy of keeping staff productive,
motivated, engaged and loyal. We achieve this through
pro-family policies and practices, and the initiatives of the
Vibrancy@Seraya Club - a group of employee volunteers
who organise activities that promote workplace health
and family life. We also nurture human capital by giving
our employees opportunities to receive training so they
can enhance their competencies, skills and personal development
Pro-family practices
STAFF WELFARE
“There is emphasis in nurturing our human capital which
includes not only training, but
also creating the conditions for
our employees to achieve a
work-life balance either through
our workplace policies or recreational activities that promote
family life.”
Over the years, PowerSeraya has developed pro-family
policies to cater to the demands of working parents who
need to juggle work and family commitments. Some of
these include flexi-work arrangements for staff upon request and the flexible/staggered start-time which was introduced recentlyt in April 2010.
Other pro-family practices, which are compliance-driven,
include the extended maternity and childcare leave. In addition to this, the company also provides childcare sick
leave for female employees and paternity leave for male
employees, both of which are over and above what is stipulated in the Singapore Employment Act.
To encourage staff to have a healthy family life, the Vibrancy@Seraya Club organises recreational activities for
employees and their family members to participate. We
also have a Flexible Benefits Plan which gives employees a fixed sum per year to cover expenses on insurance,
dental, holiday and children’s education. The company
also holds corporate memberships to the Singapore Zoological Gardens, Singapore Science Centre and Sentosa
Island so that our staff can have family outings at these
popular attractions.
132
CHAPTER 9.2
STAFF WELFARE
Table 9.2 (a) : Maternity leave statistics in the company from
FY05 to FY08
Table 9.2 (b) : Childcare leave statistics in the company from
FY05 to FY08
Table 9.2 (c) : Childcare sick leave statistics in the company from
FY05 to FY08
Table 9.2 (d) : Paternity leave statistics in the company from
FY05 to FY08
133
CHAPTER 9.2
STAFF WELFARE
9.2.i
Providing healthcare needs and promoting a
healthy lifestly
PowerSeraya provides healthcare benefits and opportunities to encourage employees to stay healthy. Workers
covered by the Comprehensive Co-Payment Scheme or
the Medisave-Cum-Subsidised Outpatient Scheme have
their medical expenses substantially paid for by the company. Employees can also make use of the Flexible Benefits Plan to pay for medical insurance.
To promote a balanced lifestyle, we organise sports and
health-related activities. Keep-fit programmes including
badminton, bowling and pool are organised weekly or
fortnightly, and in-company tournament games such as
sepak takraw are organised every year.
We also sponsor employees to participate in events like
the JP Morgan Corporate Chase Challenge and the annual Jurong Island Dragon Boat Race. They are also encouraged to join an annual health screening exercise at
subsidised rates so that they can take a personal interest
in their own well-being.
Company/staff events
PowerSeraya organises annual events to celebrate staff
efforts and achievements, as well as to foster staff bonding. The Vibrancy@Seraya Club organises and alternates
between a dinner and dance or a family day event each
year. To encourage greater camaraderie, informal events
such as the financial year-end party or festive celebrations such as Christmas parties, are also held. Each year,
employees also receive long service awards in recognition of their contributions to the company.
134
CHAPTER 9.2
STAFF WELFARE
9.2.ii Nurturing Human Captial
With Singapore’s drive to increase worker productivity by
2% – 3% each year for the next decade, plus the ageing
population growth of the country, the need to optimise the
talents of each and every individual becomes more imperative than ever as a key driver to maintain the company’s
sustainability over the long-term.
Nurturing and retaining talent is important to PowerSeraya. We believe in investing in our staff’s training and development to achieve productivity growth, create value
for the organisation and to also provide satisfying careers
for our employees. In PowerSeraya, we provide a diverse
range of training opportunities for our employees. These
include seminars, workshops and conferences, in-company training programmes, on-the-job training, practical
attachments and courses that lead to an academic qualification or professional certification.
Good and consistent performing employees are given
opportunities to apply for company support for part-time
academic or professional qualifications that are directly
linked to their job scope. As of December 2009, the company has sponsored 33 employees to upgrade their skills
and expand their knowledge base. Of these, 22 are taking degree courses or courses that lead to professional
certification.
At PowerSeraya, all employees receive regular performance and career development reviews where their performance is appraised by their supervisors against set
targets. The supervisors also discuss the training and development needs of the employee during the performance
appraisal process where competency or skills gaps are
identified to determine the training needs of the employee
for the following year.
135
CHAPTER 9.2
STAFF WELFARE
In FY2008/2009, we invested about S$532,867 in training, a dip from FY2007/2008’s S$730,000. Similarly, the
average training hours received per employee saw a reduction from 33.4 in FY2007 to 17.2 in FY2008. The dip
in training expenditure in FY2008/2009 was not due to
insufficient training budget allocated for the year but was
due to a lack of utilisation of the training budget allocated
to the Management Development Programme as the second half of 2008 and early 2009 saw many key staff busy
with the divestment exercise of the company and were
thus not available to attend external training. This resulted
in the rather modest training budget utilisation of 53.3%
for FY2008/2009. The divestment exercise was in itself an
intense learning experience for those involved although it
was not costed in dollars or time.
Although the training expenditure dipped in FY2008/2009
compared to the previous year, the average training investment of $1,284 per employee in FY2008/2009 is still
higher than the median training expenditure per employee of S$982 from the Mercer 2008 Corporate Benchmark
Monitor Singapore Survey.
Table 9.2.ii (a) : Training Statistics for the FY05 to FY09 period
136
CHAPTER 9.2
STAFF WELFARE
Competency-based recruitment practices
We believe in hiring based on the competencies required, following our technical competency inventory for each position
from which we draw up the job description. As a testimony to
our philosophy and practice, we signed the Employer’s Pledge
of Fair Employment Practices in 2006. PowerSeraya also embraces diversity and has been diversifying the workforce to
meet changing business needs. Job applications are open to
all and candidates are recruited based on their merits with no
discrimination against race, gender or nationality.
Equal Remuneration
The base salary* ratio of Female to Male (as at March 2009)
for the company is 0.86 : 1.00. The company’s gender wage
gap compares favourably with an ILO (International Labour Organisation) publication titled Work, Income and gender equality
in East Asia : Action guide 2008 (pp 34) which shows that the
Ratio of Estimated Female to Male Earned Income^ for Singapore is 0.51 : 1.00.
The compensation policy in the company is based on merit
relative to the role in the company. Staff in a particular role
are compensated based on their skills and experience, performance and contribution, market value of their position, regardless of gender, race or nationality. This aligns with the principle
of equal remuneration for men and women for work of equal
value in the organisation which is a principle that is enshrined
in the collective agreement (as per the ILO Convention 100
on Equal Remuneration ratified by Singapore) that our union
has established with the company. The company has a structured remuneration system that assigns each employee to a
particular grade/category that commensurates with the job responsibilities held by the employee in the organisation. To each
employee grade/category is a corresponding salary range.
Our performance management system ensures that the performance of every employee is appraised on an annual basis
and this rigorous system of measurement provides an objective
basis to make salary adjustments in tandem with the employees’ performance, facilitated by other information from market
salary benchmarking studies.
* Base salary is the average salary of men or women excluding benefits, bonuses, allowances and any variable wage component.
^ Estimated earned income is based on measurements of the average earnings of male to female workers (i.e. known as the raw or
unadjusted earnings ratio).
.
137
CHAPTER 9.2
STAFF WELFARE
Race
PowerSeraya’s ethnic distribution has a good representation of the minority ethnic groups and reflects our philosophy of giving equal employment opportunities to all ethnic
groups.
Table 9.2.ii (b) : Ethnic Distribution of the Workforce
(as of December 2009)
1. The ethnic composition of the resident population in Singapore in 2009 from the
Department of Statistics Singapore.
Nationality
The increasing proportion of foreign nationals serves to
meet our business needs (e.g. for specialised engineering expertise at the power plant) and is in tandem with
our view of developing an organisation with the diversity
of languages and cultures that would be an invaluable
asset should the company embark on its regionalisation
plans. Overa the past five year period FY2004/2005 to
FY2008/2009, the percentage of foreign born nationals increased by five percentage points. On the other hand, the
percentage of foreign born nationals in senior management remained relatively stable between 11.1% to 12.5%
in the period FY2006/2007 to FY2008/2009.
Table 9.2.ii (c) : Foreign Born Nationals in the Workforce
138
CHAPTER 9.2
STAFF WELFARE
Gender
To better tap the female workforce in Singapore, we have
also been consciously increasing the female mix in the
workforce, subject to the merit-based recruitment system.
Over the past five years, we have seen an estimated increase of eight percentage points in the proportion of female employees over the FY2004 to FY2008 period. In
fact, the percentage of the total workforce comprising female employees at the corporate office headquarters is
over 60% in FY2007/2008. This is higher than the Singapore’s average of 43.3% (Source: National Statistics
for Labour Force in 2008 by Gender). The proportion of
female employees within the senior management team in
FY2008/2009 is roughly the same as the previous year.
Table 9.2.ii (d) : Gender mix of workforce
Table 9.2.ii (e) : Gender mix of workforce by location
139
CHAPTER 9.2
STAFF WELFARE
Age-Profile of Workforce
The workforce at PowerSeraya generally has an older
age profile compared to the national average. For example, 63% of our employees are 40 years old and above
versus the national average of 53.8 % (Source: Singapore
Workforce, 2009 from Manpower Research and Statistics
Department Singapore Nov 2009). This is partly due to a
significant proportion of long-serving staff in the company.
For example, the average length of service of staff in the
company is 16 years. Graph 9.2.ii(f) below shows the detailed age groups of staff within the company.
Graph 9.2.ii (f) : Age Profile of PowerSeraya Staff
140
CHAPTER 9.2
STAFF WELFARE
9.2.iii
Staff Strength And Employee Turnover
The number of full-time* employees increased to 414
in FY2008/2009. This 2.7% increase over the previous
year is mainly due to new employees taken on to support our expansion plans. In FY2008/2009 we had one
part-time** employee. The company also allows for flexiwork arrangements upon request by our employees. In
FY2008/2009, we have one female employee working on
a tele-commuting basis to achieve a better balance between work and child-minding commitments.
Staff turnover in FY2008/2009 stayed at the same levels
as the previous year of 9.4%. Our turnover rate compares
favourably to the 2009 Singapore’s All Industries Average
Turnover Rate of 23.1% and is still below the Petroleum,
Chemical and Pharmaceutical Industry Turnover Rate of
10.8 % for the same period.
The company’s pro-family practices and its continued emphasis on providing a nurturing environment, where employees can achieve work-life balance and career development, helped to keep staff turnover below the industry
average.
* There are two types of full-time employees in PowerSeraya
Ltd. Those under the old scheme (permanent employment) and
those under the two- or three-year renewable term contract
subject to satisfactory employee performance.
**Part-time are deemed to work less than 30 hours a week as
stipulated in the Singapore Employment Act.
141
CHAPTER 9.2
STAFF WELFARE
Diagram 9.2.iii (a) : Employee Turnover Statistics for the period
FY05/06 to FY08/09
(Note: The Petroleum, Chemical & Pharmaceutical Industry Turnover
figures are on a calendar year basis, from 2006 to 2009)
142
CHAPTER 9.2
STAFF WELFARE
9.2.iv
Labour Practices and Basic Human Rights
With a strong emphasis on nurturing human capital in our
company, basic human rights becomes an issue that cannot be ignored, especially since it has an impact on the
working conditions and labour practices of the organisation. PowerSeraya, as a company based in Singapore
with no overseas operations outside the country, naturally
aligns its labour practices accordingly with the Singapore
government’s stance on human rights.
Singapore is an active member of the ILO (International
Labour Organisation) and fully supports the ILO’s framework and priority agenda for decent work, and upholds
both in spirit and practice the fundamental principles of
the core labour standards.
To date, Singapore has ratified 24 ILO conventions, including five of the eight conventions which are grouped under
four fundamental principles and rights at work, namely:
•
Freedom of Association and Right to Collective
Bargaining
- Convention 98
- Right to Organise and Collective Bargaining (please refer to Section 5.3.i : “Stakeholder Engagement - Em
ployee and their trade union to have an idea of how this
principle of human rights is being practised in the organisation)”
•
Elimination of all forms of forced or compulsory labour
- Convention 29
- Forced Labour
•
Effective abolition of child labour
- Convention 138
- Minimum Age
- Convention 182
- Worst Forms of Child Labour
•
Elimination of discrimination in respect to
employment and occupation
- Convention 100
- Equal Remuneration (please refer to Section 9.2ii to have an idea of how this principle is addressed in our
organisation)
143
CHAPTER 9.2
STAFF WELFARE
The above mentioned ILO conventions are translated and
incorporated locally into The Singapore Employment Act,
which governs the labour practices of all companies operating in Singapore. PowerSeraya complies fully to the
Singapore Employment Act and as such its operations
do not encounter any risks for incidents of child labour,
forced/compulsory labour.
Human Rights in Investment Agreements and our
Supplier Chain
PowerSeraya does not operate within, or are partners
in ventures or in regions where the protection of human
rights is of significant concern. As such, our active investments, which are mainly local if not all, are not subject to
any human rights criteria in screening.
Similarly, PowerSeraya does not have overseas operations that employ workers in countries where human rights
are of significant concern. Neither do we outsource any
work to human rights sensitive countries. Despite little risk
exposure to the company to human rights abuse, we require all our suppliers to adhere to the Singapore regulations on labour practices (in particular the Singapore Employment Act where the ILO conventions described earlier
have been incorporated). In addition to this, our contract
documents includes clauses that requires suppliers to: 1)
adhere to certain fair wage practices, 2)allow the freedom
for the supplier’s workers to be members of trade unions
and; 3) forbade the use of illegal foreign workers in works
performed for the company.
144
CHAPTER 9.2
STAFF WELFARE
How Work Discrimination is Handled
There are no recorded incidents of discrimination at work
during the reporting period. PowerSeraya’s Code of Ethics provides a whistle-blowing channel where employees
can report on any inappropriate acts (including acts of
discrimination) that puts the interests of other employees
or the organisation itself at risk. The company also has
a standard procedure where employees can raise their
grievances or disagreement to any company practices
(including discriminatory practices).
145
CHAPTER 9.3
Nithiah Nandan Book Prize
NURTURING THE
COMMUNITY
In 2009, the book prizes worth S$1,000 each were awarded to four of PowerSeraya employees’ children at the
Nithiah Nandan Book Prize giving ceremony which was
held in conjunction with the long service awards for our
employees. Set up in year 2007, this book prize was created in honour of the late Mr Nithiah Nandan, the former
executive secretary of the Union for Power and Gas Employees (Singapore) for his support for lifelong education
and dedication to serving others.
The book prize recognises the exemplary performance of
the employees’ children who have excelled in their areas
of interest outside the academic field or who have made
meaningful contributions to the community or the environment. As of December 2009, seven of our employee’ children have received this book prize.
“Our core value of ‘Nurture’ extends beyond the company to
the community through the social programmes it provides for
youths to develop themselves
academically and socially.”
146
CHAPTER 9.3
NURTURING THE
COMMUNITY
PowerSeraya Scholarship Programme
Between two to six outstanding undergraduates from Nanyang Technological University are selected every year to
receive this prestigious scholarship award worth S$8,000
per annum. In 2009, the company gave out four scholarships (two new and two renewals). The two new awardees, both second year undergraduates - in business and
in aerospace engineering - were also given internship opportunities in PowerSeraya.
The PowerSeraya Scholarships Programme which was
set up in 2008, is a bond-free programme. The scholars
are chosen from students pursuing courses in the College
of Engineering, the College of Science and the Nanyang
Business School from their second year of study onwards.
While students are selected primarily on their academic
and CCA (Co-curricular Activities) performance, students
who have handled environmental projects or contributed
significantly to the community are strongly considered for
the scholarship programme.
147
CHAPTER 9.3
NURTURING THE
COMMUNITY
Internships
Every year, we accept interns from tertiary institutions,
who are posted to relevant departments and guided by a
senior officer. Through this internship opportunity, the students can appreciate how their fields of study can be applied in real working life. In FY2006/2007 to FY2008/2009,
we had a total of 17 interns.
148
Social Performance
-Product Responsibility
CHAPTER 10
PRODUCT RESPONSIBILITY
Keeping
Customers In
Mind In All That
We Do
The company, through its retail arm Seraya Energy, has
been educating customers to better manage their energy
consumption which will in the long run help to mitigate the
effects of climate change action. We provide customers
with information that allow sustainable choices in relation
to efficient use of energy. Additionally, Seraya Energy has
developed a diverse range of innovative products to help
our customers minimise their risk exposure to fluctuating
energy prices as well as to cater to the specific needs
of our eco-conscious customers. Our active participation
and compliance to the Electricity Market rules contribute
towards a wholesale electricity market that operates in an
efficient, fair and competitive manner for the benefit of end
consumers. We believe this responsible approach has resulted in many satisfied customers which is important for
the long-term sustainability of our business.
“By providing our customers
with the information and tools
to help them conserve energy,
we empower them with the
knowledge to use electricity
more efficiently. Our products
help to mitigate our customer’s
risk exposure to energy price
volatility. In addition, we play an
active role in maintaining an efficient and competitive electricity market. ”
150
CHAPTER 10.1
Customer
Satisfaction
Following the 2007 customer satisfaction survey conducted by Synovate (refer to last year’s sustainability report for survey details) which revealed that 81% of our
customers gave a ‘Good’ rating and above, our company
was interested to find out if high customer satisfaction rate
translated to repeat purchases or loyalty. As such, Seraya
Energy (subsidiary of PowerSeraya) engaged Advantage
Consulting in June 2008 to conduct a customer survey
using Net Promoter Score to better understand our customers. A total of 54 key customers across 15 industry
types and customer segments responded to the survey
which sought to determine customer’s perceptions of Seraya Energy versus other competitors. The survey also
provided insights on product and service factors which
our customers were satisfied with.
The survey findings:
•
Customers were generally happy with Seraya Energy competitive pricing package.
•
Price is the main concern for customers when selecting
a service provider.
•
When customers opt out of a contract, it is usually due to:
• price
• poor service and
• other factors which are beyond their control.
•
As long as price is within customers’ acceptable price range, service becomes the next important factor for consideration.
151
CHAPTER 10.1
Customer
Satisfaction
The survey also revealed that our customers were generally happy and satisfied with our range of products and
customer service levels. Factors which our customers
were satisfied with include:
i) flexible and competitive electricity package,
ii) professional account management,
iii) helpful and polite customer care team and;
iv) good follow-up from marketing.
However, factors that can be improved include greater
communication on the latest package offers in tandem
with the dynamic market situation as well as the accessibility of Seraya Energy staff to attend to urgent queries.
Some of the other interesting survey findings revealed
that customers were looking for value for money product
offerings. Although price is an important consideration
by customers, other factors also feature significantly in a
customer’s decision. Price is often compared relative to
other factors such as the excellent service which Seraya
Energy continuously strives to provide its customers.
152
CHAPTER 10.2
Innovative
Products to
Help Reduce
Customer’s
Risk Exposure
to Energy
Price
Volatility
Seraya Energy is able to offer flexible and competitive
electricity packages that cater to the risk appetite of the
wide spectrum of customers. It tailors product packages that are compatible with the customer’s risk appetite
especially when electricity prices in Singapore are tied
closely to the volatility of fuel oil prices. One example includes the FixedPlus product where customers can lock
their electricity rate for a specified contract period. This
helps to eliminate the risk of fluctuating electricity prices.
For the less risk adverse customers, IndexPlus product
follows closely the prevailing rates of the energy cost at
all times, thus allowing customers the option to pay at the
prevailing energy rate. All these products are win-win innovative solutions where customers can be assured that
the electricity packages bought has taken into account acceptable risks, while PowerSeraya can gain from the sale
profits of such packages.
Besides products that are customised to suit the customer’s risk appetite, Seraya Energy has also created a new
product called Greenplus that aims to bundle energy offerings with features that can help our customers to be energy efficient. These products support the Sustainability
Blueprint’s goal of having 80% of Singapore buildings energy efficient by 2020 and thereby appeals to the growing
trend of environmentally conscious customers.
153
CHAPTER 10.3
Helping Our
Customers To
Conserve
Energy
Seraya Energy has conducted orientation programmes
that aim to get customers familiar with obtaining online information on their energy consumption pattern to assist in
their energy conservation efforts. Some customers have
found the information useful in shifting their consumption
patterns from peak to non-peak period in efforts to gain
electricity bill savings while conserving energy at the same
time. Further, Seraya Energy periodically updates their
website on useful energy conservation tips which our customer can easily adopt to save energy and reduce carbon
dioxide emissions. In the recent years, Seraya Energy has
also made conscious steps to save paper by promoting
e-billing to its customers. Since the e-billing feature was
introduced about 13 months ago, we now have 9.61% of
our customers who are on e-billing. Till today, Seraya Energy is still actively promoting e-billing.
154
CHAPTER 10.4
In Singapore, the Singapore Code of Advertising Practice
(SCAP) provides guidelines that promote a high standard
of ethics in advertising through industry self-regulation.
The SCAP is formulated against considerations to the national law, international law and practice, including the International Code of Advertising Practice published by the
International Chamber of Commerce. The basic premise
of the SCAP is that all advertisement should be legal, decent, honest and truthful.
Responsible
Marketing and
Advertising
SCAP is the guiding principle of ASAS (Advertising Standards Authority of Singapore) which is an advisory council
to the Consumers Assocation of Singapore (CASE). In a
situation that an investigation into a misleading advertisement uncovers an unfair business practice, ASAS may
refer to CASE for action to be taken under the Consumer
Protection (Fair Trading) Act. Under this ACT, it is an unfair
practice for a retailer to make false or misleading claims.
PowerSeraya and its subsidiaries, with its operations
based in Singapore, adhere to the abovementioned codes
and regulations in its marketing-related or advertising activities. There have been no incidents of non-compliance.
155
CHAPTER 10.5
Our Role In an
Efficient and
Competitive
Electricity
Market
Singapore’s wholesale electricity market is a gross pool
where all electricity generated (from licensed power generation companies like PowerSeraya) is sold into the pool.
All electricity consumed is also bought from the pool, except for cases of grandfathering*. The wholesale electricity market determines prices for electricity all year round
in half-hour timeslots using a pricing algorithm which minimises costs by balancing electricity demand with the
offers to supply electricity. Power generation companies
(or ‘gencos’ for short) compete with one another by offering prices to supply electricity (in half-hour timeslots) into
the wholesale electricity market. The wholesale electricity market thus serves as a platform for open and free
competition to take place by allowing multiple gencos to
compete in the supply of electricity as opposed to the traditional model of a single monopoly supplier of electricity
which charges regulated tariffs for electricity provision.
Electricity generation is a licensable activity under the
Electricity Act (Singapore). Gencos are required by their
electricity licences (granted by the Energy Market Authority of Singapore (EMA)) to abide by the Singapore Electricity Market Rules (“Market Rules”) which requires them
to register as market participants and be subjected to the
Market Rules. The Market Rules play an important role
in ensuring that the wholesale electricity market operates
and functions in manner that is consistent with the efficient and fair operations of a competitive market. In doing
so, it creates a level playing field for gencos to compete
in the wholesale electricity market, resulting in competitive electricity prices for end consumers in the contestable
market**.
156
CHAPTER 10.5
Our Role In an
Efficient and
Competitive
Electricity
Market
The Market Surveillance and Compliance Panel (MSCP)
is an independent body set up under the Market Rules
that is charged with policing the compliance with the Market Rules and is empowered to impose financial penalties
for breaches of the Market Rules. The financial penalties
are collected by the wholesale electricity market operator
Energy Market Company Pte Ltd (EMC) and are used to
reduce the electricity price paid by consumers.
In determining breaches of the Market Rules, the MSCP
among other things such as awarding costs may also impose financial penalties. Financial penalties have been
imposed for cases where there have been significant impact on the wholesale electricity market or negligence.
There have been two breaches of the Market Rules by
PowerSeraya which have resulted in the imposition of financial penalties. Both of these breaches were caused
by human error and not by any intentional nor deliberate
acts by PowerSeraya to disrupt the smooth operations of
the wholesale electricity market. PowerSeraya fully understands the important role of the wholesale electricity
market in determining competitive electricity prices for the
benefit of consumers in the contestable market and has
taken corrective action to prevent a recurrence of these
breaches caused by human error. Details of the breaches
are provided below.
157
CHAPTER 10.5
Our Role In an
Efficient and
Competitive
Electricity
Market
One breach occured on 23 August 2005 and was determined to be a breach by the MSCP on 24 August 2006
which imposed a financial penalty of $7,500 and costs of
$800. The breach was due to human error. One of PowerSeraya’s generating units, SER G3, had tripped. PowerSeraya had to reflect the trip by making changes to the
offers from SER G3 but another generating unit SER CCP
1 was selected by mistake. This resulted in a breach of
the Market Rules as the change to the offers from SER
CCP1 were within the gate closure period (a time period
where offers are not to be changed except due to permissible exceptions) even though there were no permissible
exceptions applicable such as incidents due to tripping.
The MSCP had assessed that the breach had significant
impact on the wholesale electricity market. PowerSeraya
has since then put in place remedial measures (combination of extra training and IT solution) to prevent such
recurrence. Details of the breach are publicly available
at the Electricity Market Company website (www.emcsg.
com)
The other breach occurred on 28 February 2009 and
was determined to be a breach by the MSCP on 21 August 2009 which imposed a financial penalty of $12,500
and costs of $800. The breach was due to human error
which resulted in data corruption, resulting in offer variations made in addition to a PowerSeraya trader’s inputs.
These additional offer variations resulted in a breach of
gate closure with no permissible exceptions applicable.
The MSCP had assessed that the breach had significant
impact on the wholesale electricity market. PowerSeraya
has since then put in place remedial measures in the form
of an IT solution to prevent such recurrence. Details of
the breach are publicly available at the Electricity Market
Company website (www.emcsg.com) .
158
CHAPTER 10.5
Our Role In an
Efficient and
Competitive
Electricity
Market
PowerSeraya’s Enterprise Risk Management Department
had a role in assessing the mitigation measures implemented in the aftermath of breaches of the Market Rules,
on whether adequate measures have been undertaken.
The breach of 28 February 2009 was reported to PowerSeraya’s Risk Managment Committee.
* Grandfathering in this context refers to the exemption
from the requirement to hold a licence to generate electricity that has been granted to six companies. The exemption is granted subject to certain conditions such as not
injecting electricity into a transmission system. It is also
granted to companies who generate electricity from self
consumption, that is embedded generators, and whose
generation facilities were installed before 1 January 2003
which was the date of commencement for the National
Electricity Market of Singapore (NEMS), the wholesale
electricity market arrangements which replaced the previous wholesale electricity market arrangements, the Singapore Electricity Pool.
** Contestable market refers to the consumers classified
as contestable. Consumers classified as contestable enjoy competitive rates from the wholesale electricity market. Such consumers are mainly large industrial and commercial consumers (consumers with average electricity
consumption of 10,000kWh or more) which make up to
about 75% of the electricity demand in Singapore according to EMA. The non-contestable market comprises domestic consumers and consumers with average electricity
consumption lower than 10,000Kwh per month, making
up approximately 25% of the total Singapore electricity
demand. This group is currently not eligible to become
contestable, as well as larger consumers who have not
switched to become contestable. These consumers are
subject to regulated tariffs for electricity. The contestable
market falls under Phases 0, 1 & 2 of the Singapore’s government initiative to liberalise the electricity market. Phase
3, which is yet to be implemented as of December 2009.
159
GRI Content Index
Table 11.1 – GRI Performance Indicators
*FY refers to the period starting from 1st April of a particular year to 31st March of the successive year. For example,
FY08/09 refers to the period 1 Apr 08 to 31 Mar 09.
All dollar values are denominated in Singapore currency.
No. GRI
Performance
Indicators
FY 06/07*
FY 07/08*
FY 08/09*
Section
Ref
4.2
Remarks
A) ECONOMIC PERFORMANCE
1
EC1
1a. Total
Revenue (In
S$'000)
2,623,607
2,792,837
3,576,561
1b. Total Costs
(In S$'000)
2,436,766
2,554,720
3,388,148
1c. Total
Earnings (In
168,060
218,296
171,850
1d. Employee
40,135
Compensation (In
S$'000)
42,844
51,932
Refer to
Annual Report
2008/2009
(Pg 68)
1e. Total Assets
(including leased
assets) (In
S$'000)
1,894,618
2,113,450
2,313,450
Refer to
Annual Report
2008/2009
(Pg 47)
1f. Shareholder's
funds (In S$'000)
1,073,426
1,212,749
1,197,896
Refer to
Annual Report
2008/2009
(Pg 48)
1g. Earning per
share (in S$)
0.19
0.25
0.19
4.2
1h. Return on
Equity (%)
16.11
19.1
14.26
4.2
170.95
312.84
4.2
Refer to
Annual Report
2008/2009
(Pg 46)
4.2
S$'000)
1i. Donations and 46.54
other community
investments (In
S$'000)
2
EC2
Financial
Refer to Chapter on Climate Change
implications and
other risks and
opportunities for
the organisation's
activities due to
climate change
6.4
3
EC3
Coverage of the
organisation's
defined benefit
plan obligations
(in S$'000)
Not reported previously
4,700
4.6
4
EC4
2a. Significant
financial
assistance
received from
government
NIL
NIL
4.3
5
EC6
Policy, practices,
and proportion of
spending on
locally-based
suppliers at
significant
locations of
operation
Refer to Chapter on Economic Performance
6
EC7
Procedures for
local hiring and
proportion of
Refer to Chapter on Human Capital on our hiring
practices
$34,000
4.4
9.2.ii
senior
management
hired from the
local community
at significant
locations of
operation
% Foreign Born
Nationals in
Senior
Management
team
7
EC8
12.5%
Development and NIL
impact of
infrastructure
investments and
services provided
primarily for
public benefit
through
commercial,
11.1%
11.1%
Energy
Learning Hub
investment
9.2.ii –
Table
9.2.ii(c)
4.5
in-kind, or pro
bono
engagement
8
EU9
Provisions for
decommissioning
of nuclear power
sites
There are no nuclear power sites in Singapore.
As a company with power generation operations
in Singapore, this indicator does not apply.
9
EU10
Planned capacity
(MW) against
projected
electricity
demand over the
long term
3,100
(licensed)
3,100
(licensed)
3,100
(licensed)
10
EU11
Average
generation
efficiency of
thermal plants by
energy source
42.75
42.1
41.98
3
It is
commercially
sensitive in
the Singapore
business
environment
to report on
the generation
efficiency of
thermal plants
by energy
source. What
we can report
are efficiency
figures for the
entire power
plant.
and by regulatory
regime
11
EU12
Transmission
and distribution
losses as a
percentage of
total energy
Not applicable as the company does not
participate in any transmission and distribution
business activities.
B) ENVIRONMENTAL PERFORMANCE
12
EN1
Materials used
by weight or
volume
Refer to Chapter on Environmental Performance
13
EN2
Percentage of
materials used
that are recycled
input materials
Refer to Chapter on Environment Performance
14
EN3
Fuel Oil
1,550,551
consumed for
power generation
(in tons)
1,295,196
1,241,630
7.1.x
7.1.11
7.1.6
Natural gas
34,860
consumed for
power generation
(BBTU)
34,457
32,160
7.1.6
904,943
1,362,680
7.1.5
1,992,500
1,713,055
(66% from
desalination
plant *, 34%
from water
utilities)
7.1.7
15
EN4
Indirect energy
consumption by
primary source
(in Mwh)
16
EN8
Total water
2,186,600
consumption for
power generation
(m3)
17
EN11
Location and size NIL
of land owned,
leased, managed
in, or adjacent to,
protected areas
and areas of high
biodiversity value
outside protected
areas
7.1.12
18
EN12
Description of
significant
Not applicable as the company operations is not
located in (nor located adjacent to) areas of high
biodiversity value.
7.1.12
0.592
0.582
0.587
7.1.6
223.7
(calendar year
2007)
222.4
(calendar year
2008)
223.7
7.2.1
Energy
efficiency
improvements
Energy
efficiency
improvements
Energy
efficiency
improvements
impacts of
activities,
products, and
services on
biodiversity in
protected areas
and areas of high
biodiversity value
outside protected
areas
19
EN16
Total direct GHG
emissions (CO2
1,093,767
only) by weight in
tons per MWh
arising from
power generation
20
EN17
Other indirect
GHG emissions
(CO2 only) by
weight (in tons)
21
EN18
Initiatives to
reduce GHG
emissions and
6
* Owned
Desalination
plant provides
renewable
water source
reduction
achieved
& Fuel
switching
& Fuel
switching
& Fuel
switching
22
EN19
Emissions of
ozone-depleting
air emissions by
weight (kg)
157.5
135
247.5
7.1.6
23
EN20
SO2 emissions
by weight (in
tons/MWh)
0.0031
0.0029
0.0034
7.1.6
NO2 emissions
by weight (in
tons/MWh)
Not available
Not available
Not available
7.1.6
Within
regulations
24
EN21
Total water
discharge by
quality and
destination
(includes thermal
discharge)
BOD:
<20mg/L
COD:
<20mg/L
TSS:
<30mg/L
Total Metals:
<1mg/L
Oil & Grease:
<10mg/L
Temperature:
< 30°C
BOD:
< 10mg/L
COD:
<40mg/L
TSS:
<10mg/L
Total Metals:
<1mg/L
Oil & Grease:
<5mg/L
Temperature:
< 30°C
BOD:
< 30mg/L
COD:
<100mg/L
TSS:
<20mg/L
Total Metals:
<1mg/L
Oil & Grease:
<5mg/L
Temperature:
< 30°C
7.1.7
Within
regulatory
limits
25
EN22
Total weight of
waste by type
and disposal
method
Toxic
Industrial
Waste:
7,035 tons
Recyclable
Waste:
126,156 tons
General
Waste:
540 tons
Total =
133,731 tons
Toxic
Industrial
Waste:
8,611 tons
Recyclable
Waste:
96,090 tons
General
Waste:
562 tons
Total =
105,263 tons
Toxic
Industrial
Waste:
10,300 tons
Recyclable
Waste:
86,859 tons
General
Waste:
485 tons
Total =
97,643 tons
7.1.8
Within
regulations
26
EN23
12. Total number
and volume of
significant spills
No recorded
oil spills
No recorded
oil spills
No recorded
oil spills
7.1.9
27
EN24
Weight of
transported
(import & export)
or treated waste
deemed
hazardous under
the terms of the
Basel
Convention
125,909 tons
(gypsum) 65
tons (boiler
slag)
95,056 tons
(gypsum) 0 ton
(boiler slag)
87,069 tons
(gypsum) 242
tons (boiler
slag)
7.1.8
Within
regulations
28
29
30
EN26
EN28
EN27
% of transported
waste shipped
internationally
94.2
90.3
89.4
7.1.8
Initiatives to
mitigate SO2
Flue Gas
Desulp
hurization
System
Flue Gas
Desulp
hurization
System
Flue Gas
Desulp
hurization
System
7.1.6
% of SO2
mitigated
92.92
92.94
94.18
7.1.6
Monetary value
of significant
fines
NIL
NIL
NIL
7.1.12
Total number of
non-monetary
sanctions for
non-compliance
with
environmental
laws and
regulations.
NIL
NIL
NIL
7.1.12
Percentage of
products sold
and their
packaging
materials that are
reclaimed by
category
Not applicable for the company's business where
products do not involve packaging materials
7.1.10
C) SOCIAL PERFORMANCE
31
LA1
16a. Total
employees
(full-time)
381
403
414
9.2.3
16b. Total
employees
(part-time)
0
0
1
9.2.3
16c. Total
employees
(contract basis)
0
0
0
9.2.3
16d. Total
6
number of interns
4
7
9.2.3
16e. Female
employees of
total workforce
(%)
20.6
22.2
17.8
9.2.ii –
Table
9.2.ii(d)
Within
regulations
32
LA2
16f. Females in
senior
management (%)
Not reported
earlier
11.1%
12.5%
9.2.ii –
Table
9.2.ii(d)
16g. Foreign
born nationals of
total workforce
(%)
4.7
7.2
7.7
9.2.ii –
Table
9.2.ii(c)
17a. Total no. of
employee
turnover
24
38
39
9.2.iii
17b. Rate of
employee
turnover (%)
6.3
9.4
9.4
9.2.iii
56.96
53.85
52.0
5.3.i
33
LA4
Percentage of
employees
covered by
collective
bargaining
agreements (%)
34
LA5
Minimum notice
Refer to Utilities Group Restructuring exercise
period(s)
regarding
significant
operational
changes,
including whether
it is specified in
collective
agreements
5.3.i
35
LA7
Rate of injury
(including
fatalities) - Staff
AFR = 2.24
AFR = 0
AFR = 1.08
9.1.i
Rate of lost days
- Staff
ASR = 60.39
ASR = 0
ASR = 47.66
9.1.i
Rate of
work-related
fatalities - Staff
0
0
0
9.1.i
Rate of injury
(including
fatalities) Contractor
AFR = 0.00
AFR = 3.45
AFR = 1.44
9.1.i
Rate of lost days
- Contractor
ASR = 0.00
ASR = 16.39
ASR = 4.33
9.1.i
Rate of
work-related
0
0
0
9.1.i
fatalities Contractor
36
LA8
Education,
training,
counseling,
prevention, and
risk-control
programs in
place to assist
workforce
members, their
Refer to audiometric tests and H1N1 Pandemic
Flu
9.1.iv
families, or
community
members
regarding serious
diseases
37
EU21
Contingency
planning
measures,
disaster/
emergency
management
plan and training
programs, and
recovery /
estoration plans
Refer to Chapter 5.2i on 'Managing Emergencies
and Crisis'
5.2.i
38
LA10
Total training
investment ($)
901,000
730,000
532,867
9.2.ii
Average training
expenditure per
employee ($)
2,365.50
1,802
1,284
9.2.ii
Average training
hours per
employee
52.0
33.42
17.20
9.2.ii
Training places
per employee
2.63
1.69
1.71
9.2.ii
100%
100%
9.2.ii
39
LA12
Percentage of
employees
receiving regular
performance and
career
development
reviews.
100%
40
LA13
Composition of
governance
bodies and
breakdown of
Refer to employee demographics (race, gender,
diversity)
9.2.ii
employees per
category
according to
gender, age
group, minority
group
membership, and
other indicators
of diversity
41
LA14
Ratio of basic
salary of men to
Refer to Chapter on Equal Remuneration
9.2.ii
women by
employee
category
42
SO1
Nature, scope,
Refer to the CDM Stakeholder Consultative
and effectiveness Session for our latest 800MW Combined Cycle
of any programs
plant under Chapter 'Climate Change and Us'
and practices
that assess and
manage the
impacts of
operations on
communities,
including
entering,
operating, and
exiting
43
SO2
Percentage of
100%
business units
analyzed for risks
related for
corruption
100%
100%
5.2.ii
Total number of
100%
business units
analyzed for risks
related for
corruption
100%
100%
5.2.ii
6.5
44
SO3
Percentage of
employees
trained in
organization's
anti-corruption
policies and
procedures
Refer to Chapter on Managing Fraud Risk
5.2.ii
45
SO4
Actions taken in
response to
incidents of
corruption
No incidents of corruption
5.2.ii
46
SO5
Public policy
positions and
participation in
public policy
development and
lobbying
Refer to Chapter on Stakeholder Engagement External Commitments
5.3.ii
47
SO8
Monetary value
of significant
fines and total
number of
non-monetary
sanctions for
non-compliance
with laws and
regulations
NIL
10.4
48
HR1
Percentage and
total number of
Refer to Chapter on Human Rights
9.2.iv
significant
investment
agreements that
include human
rights clauses or
that have
undergone
human rights
screening
49
HR2
Percentage of
significant
suppliers and
contractors that
have undergone
screening on
human rights and
actions taken
9.2.iv
50
HR4
Total number of
incidents of
discrimination
and actions
taken
Refer to Chapter on Discrimination at Work
9.2.iv
51
HR5
Operations
identified in
which the right to
exercise freedom
of association
and collective
bargaining may
be at significant
risk, and actions
taken to support
Covered by
Collective
Agreement
5.3.i
Covered by
Collective
Agreement
Covered by
Collective
Agreement
these.
52
HR6
Operations
identified as
having significant
risk for incidents
of child labor,
and measures
taken to
contribute to the
elimination of
child labor
9.2.iv
53
HR7
Operations
identified as
having significant
risk for incidents
of forced or
compulsory
labor, and
measures taken
to contribute to
the elimination of
forced or
compulsory labor
9.2.iv
54
PR3
Type of product
and service
information
required by
procedures, and
percentage of
significant
products and
services subject
Refer to Chapter on Product Responsibility in
respect to innovative products and information on
energy conservation. .
10.2 10.3
to such
information
requirements
55
PR5
Customer
satisfaction
levels
No customer
survey this
year
81.4% ('Good'
rating &
above)
Refer to
Customer
survey findings
by Advantage
Consulting
56
PR6
Programs for
adherence to
laws, standards,
and voluntary
codes related to
marketing
communications,
including
advertising,
Refer to Chapter on Product Responsibility
10.1
10.4
promotion, and
sponsorship
57
PR9
Monetary value
of significant
fines for
non-compliance
with laws and
regulations
concerning the
provision and
use of products
8,300
NIL
13,300
10.5
and services (in
S$)
Table 11.2 – References for Standard Disclosures and Management Approaches
Standard Disclosure
Section
Strategy and Analysis
1.1 – CEO's Message
1.2 – Key impacts, risks and opportunities
1
3.1,6.4
2.1 – Name of Organisation
3
2.2 – Brands, products, services
3
2.3 – Operational structure of the organisation
3.2
2.4 – Location of the organisation's headquarters
3
2.5 – Number of countries in which the organisation operates
3
2.6 - Ownership
3
2.7 – Markets served
3
2.8 – Scale of the organisation
3
2.9 – Significant changes during reporting period
3
2.10 – Awards/Achievements
3.3
Report Parameters
3.1 – Reporting Period
2
3.2 – Previous reports (if any)
2
3.3 – Reporting cycle
2
3.4 – Contact point on report queries
2.2
3.5 – Defining the report content
2.2
3.6 – Report boundary
2.1
3.7 – Specific limitations on scope/boundary of the report
2.1
3.8 – Basis for reporting on subsidiaries
2.1
3.9 – Adherance to GRI Indicator Protocols
2.1
3.10 – Effects of restatements from previous reports (if any)
2.2
3.11 – Changes from previous reporting periods (if any)
3.12 – GRI Content Index
3.13 – Assurance
2
Table 11.1
12
Corporate Governance, Commitments and Stakeholder Engagements
4.1 – Governance Structure of the organisation
5.1
4.2 – Chair of the highest governance body
5.1
4.3 – Members of the Board
5.1
4.4 – Mechanisms for providing direction and recommendation to the Board
5.1
4.5 – Linkage between compensation for the Board and sustainability performance
5.1
4.6 – Process to avoid conflict of interests
5.1
4.7 – Qualification and expertise of the Board in guiding sustainability strategy
5.1
4.8 – Internally developed statements of mission, values, etc
5.1
4.9 – Procedures for the Board to oversee sustainability performance
5.1
4.10 – Process to evaluate the Board's performance on sustainability
5.1
4.11 – Precautionary principle
5.2
4.12 – Subscription to external charters, principles
5.3.ii
4.13 – Membership in associations with advocacy organisations
5.3.ii
4.14 – Stakeholder groups
5.3
4.15 – Basis of identification and selection of stakeholders
5.3
4.16 – Approaches to stakeholder engagement
5.3.1
4.17 – Key topics and concerns raised during stakeholder engagement
5.3.1
Management Approaches
Economic
Environmental
4.2, 3.1
6.1, 6.4, 7, 7.1
Labour
9, 9.1_2, 9.2
Society
4, 4.5, 5.2.i, 5.2.ii, 7
Human Rights
Product Responsibility
5.3.1, 9.2.4
10.4
Third Party Assurance
Independent assurance
statement
The assurance engagement was conducted at the
corporate headquarters, Pulau Seraya Power Plant and
and Jurong Power Station between June 21 and July 14,
2010.
To the Management and Stakeholders of PowerSeraya
Limited
Responsibility and independence
For the second year, Ere-S Pte Ltd was commissioned by
PowerSeraya Ltd to provide assurance that the content of
its Sustainability Report is accurate, reliable and
supported by solid data collection systems. For qualitative
information, the assurance is based on evidence that the
statements truly reflect PowerSeraya’s operational and
strategic activity.
The responsibility of Ere-S was to execute the assurance
engagement, prepare the assurance report and this
assurance statement for the management of PowerSeraya
alone and for no other purpose. The management of
PowerSeraya was responsible for the preparation of the
Sustainability Report and all statements and figures
contained within it.
Scope and objectives
Ere-S was not responsible for any prior work on the
Sustainability Report. The activity of Ere-S is independent
to PowerSeraya and contains no other financial interest in
their business operation.
The assurance engagement was executed in accordance
with the AA1000 Assurance Standard (AA1000AS 2008).
Following a Type 2 assurance of the standard, we
evaluated the adherence to the AA1000 AccountAbility
Principles (AA1000APS 2008) and the reliability of the
performance information contained in the Sustainability
Report.
The audited information included figures and statements
on CSR initiatives, strategy, policies, procedures, key
performance indicators, management systems and
associated processes. Information not related to
sustainability and already supported by existing
documents, such as the Annual Report, was not covered in
the audit. This includes all or part of the organisation
profile, corporate structure and corporate financial and
economic performance, technical descriptions of buildings
and plants, equipment and production processes. Ere-S
did not assure the Sustainability Report for the GRI
Application Level check but did evaluate all new indicators
and other relevant information found in the GRI index
table.
We provided a moderate level of assurance with
management-level data verification and evidence
gathering from diverse sources. We did not execute multilevel research to determine materiality and stakeholders
relevant to the company. However, the company’s
sustainability systems and processes were evaluated using
the inclusivity, materiality and responsiveness criteria of
the AA1000 AccountAbility Principles. The quality of the
Sustainability Report content was evaluated using the GRI
G3 quality principles.
Methodology
During the preparation phase, we reviewed the
Sustainability Report content and the company’s CSR
framework, procedures and policies to identify the
relevant elements to be audited. Statements and data sets
were classified according to the relevant data owners and
the type of evidence required for the audit process.
We interviewed 18 individuals, including the CEO, group
heads from Corporate Services and Utiltiies, and
managers of key business units Environmental, Human
Resources, Legal & Regulatory Affairs, Energy Markets,
Seraya Energy, Corporate Finance as well as the President
of the Union of Power & Gas Employees. Specific
questions on the adherence to AA1000 principles were
asked during the interviews and evidence of the relevant
data, collection and calculation methods as well as
information on the underlying processes were collected
and evaluated. Audited information included internal
publications, data sheets, certificates, emails, policies,
reports, press releases and web sites of external parties.
After each interview, we provided recommendations to
allow immediate amendment by the PowerSeraya
sustainability reporting team. We checked the final
version of the Sustainability Report to confirm the actions
had been taken following those recommendations.
PowerSeraya Limited, Sustainability Report Assurance Statement, July 2010
1/3
Findings and observations
On the basis of our review, nothing has come to our
attention that causes us to believe that the sustainability
framework of PowerSeraya does not adhere to the
AA1000 AccountAbility Principles. In addition, the findings
of the assurance engagement provide confidence, within
satisfactory limits, that the reported performance
information provides a reliable and fair representation of
the PowerSeraya sustainability profile and is supported by
comprehensive and verifiable data and underlying
management processes.
Notwithstanding new ownership of the company, which
implied operational and strategic changes, we have found
that PowerSeraya’s commitment to improve its CSR
performance has remained steadfast since the last
reporting exercise in 2009.
We are also pleased to see that recommendations for
improvement expressed during last year’s assurance
engagement have been followed for this reporting
exercise. These include the disclosure of more information
on sustainability performance such as the indirect
emission of CO2 from purchased electricity, and
expanding the scope with specific material issues in the
area of human rights, although the latest are yet not
covered by formal policies and data collection processes.
Evaluation of reported sustainability performance
Based on the work undertaken, we are confident that the
Sustainability Report content satisfies the requirements of
GRI G3 quality principles. The report is detailed and
comprehensive with a significant number of GRI indicators.
Historical and comparable figures are disclosed for the
majority of the elements and the inclusion of negative
aspects of the company sustainability performance
provides a fairly balanced view.
On the basis of a moderate level of assurance, the report
shows a satisfying level of accuracy and reliability. We
have found evidence for all elements audited with only a
small number of cases where the data source was not
properly reflected in the report due to incorrect
transcription or calculation. These minor inaccuracies
were immediately corrected by the sustainability
reporting team. The team also followed the majority of
the other recommendations expressed by Ere-S, which
covered the insertion of additional statements, figures
and indicators.
We recommend the disclosure of more measurable
targets covering all relevant sections of the report and GRI
categories. Similarly, new or improved guidelines and data
collection processes could be developed for data sources
not reported yet but deemed material, such as input
materials, recycled materials and customer satisfaction
level.
Evaluation of the adherence to AA1000 AccountAbility
Principles
Inclusivity - How the organisation engages with
stakeholders and enables their participation in identifying
issues and finding solutions.
We have found evidence of processes for engagement
with all stakeholder groups mentioned in the
Sustainability Report. The most significant interaction and
feedback mechanisms include regular staff management
dialogues, supplier meetings, customer surveys and safety
surveys. Stakeholder involvement in decision making is
essentially seen through the frequent meetings with the
union. In the areas of environment and health & safety,
stakeholder engagement is strong and supported at all
levels of the company.
However, for other sustainability areas such as impact on
the community, stakeholder engagement is limited and
made on a per project basis. Although most of the social
and labour issues in Singapore are covered by regulations
and government bodies, PowerSeraya could benefit from
more structured and specific engagement processes with
the community, NGOs and suppliers to assess their needs
and perception of the company.
Materiality - How the organisation recognises issues that
are relevant and significant to it and its stakeholders.
We have found that PowerSeraya has applied appropriate
methodologies to identify its material issues. Assessment
of priority and significance of these issues is done through
feedback obtained from stakeholders and the work done
during the sustainability reporting exercise. The inclusion
in the report of new GRI indicators related to human
rights and the GRI Electric Utility Sector Supplement
shows the efforts made in redefining the materiality scope.
Areas of improvement include embedding formal
processes in the company’s management system to reevaluate and identify current and emerging material
issues on a regular basis. Inclusivity of stakeholders will
play an important role in that aspect.
2/3
Although we did not find any high materiality issues that
PowerSeraya has not addressed within the Sustainability
Report, further development of the scope could be
considered in the areas of community impact in the region
surrounding the power plant, and labour practices other
than health & safety in the supply chain.
Singapore, 16 July 2010
Responsiveness - How the organisation responds to
stakeholder issues and feedback through decisions,
actions, performance and communication.
PowerSeraya responsiveness to stakeholders concerns
and expectations is seen through diverse interaction
mechanisms and other processes embedded in the
management system, such as the ISO14001 and the
OHSAS 18001.
Mechanisms to inform stakeholders include customised
publications for employees, shareholders and customers
as well as more global outreach such as the company
website, education programmes to the community and a
detailed Sustainability Report based on internationally
recognised standards (GRI and AA1000).
Jean-Pierre Dalla Palma, Director and Lead Auditor
Poh Shuxian, Director
Ere-S Pte Ltd is a consulting company specialising in
business sustainability and provides services in the
domains of CSR strategy design and implementation,
stakeholder engagement, sustainability reporting,
sustainability report assurance and training.
The above findings and additional suggestions for
improvement have been presented to the management of
PowerSeraya in a more detailed assurance report.
3/3

2009/2010 - YTL PowerSeraya

Transcription

Similar documents

Sure-Win Dip

Dumex Code violations (Danone)

Look around you, it couLd save your Life

no anyone ho uses electricity for his her business

22-Nov-2012 - Singapore Gaelic Lions

Property Life Media Kit 2013

ZOUKOUT 2011

olefins fuel gas recovery presenters: sean mollberg and john west

PDF - Aetius Capital

Night Festival 2012 Sunsilk Academy Fantasia Dole Yonanas